Hopes that interest rates will be lowered in the next few months have risen after a Bank of England survey revealed employers are expecting wage bills to grow at a slower pace than first predicted.
The Bank of England's Decision Maker Panel survey, which is closely watched by the Monetary Policy Committee, found that companies expected wage growth to rise by 4.2% on a three-month average basis in July, marking a 0.3% dip from prior predictions.
It represents the lowest level of wage growth expectations since May 2022.
Wage growth has currently been rising at rates too high for the Bank of England's liking, but today's survey indicates that the market is cooling, which could influence MPC members into voting to cut rates from highs of 5.25%.
"Annual wage growth was 6.0% in the three months to June, unchanged from the three months to May," the BoE said.
"Firms therefore expect their wage growth to decline by 1.8 percentage points over the next 12 months based on three-month averages."