Today’s labour market figures are a double-edged sword.

Wages are rising at a record pace and are on the cusp of outpacing inflation.

It means our dwelling requirements are now not taking the battering they as soon as had been.

That ought to give odd households one thing to have a good time however it should trigger consternation on the Bank of England.

Policymakers have been holding a detailed eye on wage development as a result of they concern that strong pay rises may gas inflation.

It means they’re much more prone to increase rates of interest once more on the subsequent financial coverage committee assembly on 21 September.

The Bank is prone to increase charges from 5.25% to five.5% in September however extra fee rises will most likely observe.

Financial markets now anticipate the bottom fee to peak at 6% – up from 5.75% final week.

That’s dangerous news for anybody rolling off a hard and fast fee mortgage or sitting on a variable or tracker deal.

Renters are also likely to feel the pain as landlords attempt to cross on greater mortgage prices.

The Bank has raised rates of interest for 14 consecutive times and the complete influence of these fee rises continues to be working its method by way of the economic system.

It’s a troublesome name for policymakers as a result of although wages are nonetheless rising robustly (helped partially by the large one-off pay rise to thousands and thousands of NHS staff) there are indicators that the economic system is weakening.

The inflation fee is falling, and figures launched tomorrow will doubtless present that it fell once more in June – from 7.9% to six.8%.

This continues to be significantly above the Bank’s 2% goal, however it’s shifting in the fitting route.

Rising rates of interest are additionally taking their toll on the roles market – the unemployment fee jumped from 4% to 4.2%. So, there are many indicators that financial tightening is taking some steam out of the UK economic system.

Members of the Monetary Policy Committee must weigh up all the information and make a judgement concerning the pattern that wages, unemployment and inflation are prone to observe over the approaching months.

Not solely is inflation anticipated to drop quickly however so is wage development.

Samuel Tombs, economist at Pantheon Macroeconomics, mentioned: “It usually takes time for changes in labour market tightness to feed through to wage growth, and several survey indicators now point to slowing wage increases.”

However, he added: “The momentum in wage growth still is too strong for the committee to take a break just yet.”