The Bank of England is facing a renewed challenge in its efforts to manage inflation and steer the economy, after fresh data showed starting salaries in the UK rose at their fastest pace in nearly three years.
According to the latest figures from job search platform Adzuna, the average advertised salary hit £42,278 in April, a rise of 8.9% year-on-year, marking the steepest annual increase since June 2022. On a monthly basis, salaries rose by 0.75%, further complicating the central bank’s efforts to justify additional interest rate cuts.
The figures underscore a growing tension for the Bank of England’s Monetary Policy Committee (MPC), just weeks after it voted 5-4 to reduce the base rate by 0.25 percentage points to 4.25%. Several MPC members, including the Bank’s chief economist Huw Pill, had expressed concern about elevated wage growth, warning that loosening monetary policy too quickly could reignite inflationary pressures.
“After signs of recovery in March, April brought a reminder that this remains a delicate job market,” said Andrew Hunter, co-founder of Adzuna. “Vacancies dipped and salary growth, while still strong on an annual basis, is starting to show signs of slowing.”
The strongest wage growth was seen in Northern Ireland, where salaries climbed 12.4%, followed by Scotland at more than 11%. In London, advertised pay rose by 8.4% to an average of £48,635.
Meanwhile, Adzuna reported that job vacancies edged up 1% year-on-year to 862,876, but were down 0.95% compared to March, suggesting a mixed picture for hiring momentum. The data chimes with official figures from the Office for National Statistics (ONS), which showed that overall vacancies fell to 761,000 in the three months to April, well below the 1.3 million post-pandemic peak.
Sectors seeing the strongest demand for workers included healthcare, which hit its highest vacancy level since January 2023, as well as hospitality, logistics, teaching, and retail. The construction and trade sectors, by contrast, recorded a sharp 15.2% decline in vacancies, reflecting cooling activity in those industries.
The Bank of England had been hoping for a clearer signal that inflationary pressures were easing before committing to a series of rate cuts in the second half of 2025. However, April’s inflation surprise, which saw the consumer price index jump to 3.5%, up from 2.6% in March, has prompted fresh caution.
Combined with resilient consumer spending—evidenced by a 1.2% rise in retail sales last month—and persistent wage growth, the MPC may feel compelled to hold rates steady until there is more conclusive evidence that price and wage pressures are subsiding.
Although the ONS reported a slight slowdown in overall wage growth, down to 5.6% in Q1 from 5.9% in Q4, starting salary trends suggest that employer competition for skilled staff remains high, particularly in regions with labour shortages.
The dilemma now facing policymakers is whether to stay the course with rate reductions to stimulate growth, or pause to prevent an inflationary rebound.
As the Bank weighs its next move, all eyes will be on the June inflation data and updated wage figures. For now, the data suggests that the path to monetary easing remains narrow, and paved with economic contradictions.
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Bank of England faces interest rate dilemma as starting salaries rise nearly 9%
