Bank of England cuts wage forecast

The Bank of England has halved its forecast for average wage growth, saying it now expects average salaries to rise by 1.25% this year.

The forecast comes as official figures showed average wages, not taking into account bonuses, grew by 0.6%.

That is the slowest pace of growth since the records began in 2001.

Nevertheless, the Bank upgraded its growth forecast for this year to 3.5% from 3.4%, and for 2015 it forecast growth of 3%, up from 2.9%.

The Bank’s latest economic assessment also indicated that it believed the level of spare capacity in the UK economy has narrowed to 1% of GDP.