UK wage growth rose in November, official data showed, as the Bank of England continues to face pressure to keep interest rates on hold amid concerns about lingering inflationary pressures.

As the government faces economic pressures, the Office for National Statistics (ONS) said average weekly earnings rose by 5.6% annually in the three months to the end of November, up from 5.2% in the three months to the end of October.

City economists had predicted that annual total wage growth would accelerate. The reading is in line with expectations for total compensation but slightly higher than expectations for regular compensation (excluding bonuses).

Liz McKeown, director of economic statistics at the ONS, said: "Pay growth has picked up for the second consecutive period, again driven by strong growth in the private sector. Real wage growth excluding the impact of inflation has increased slightly. "

The data also showed that the unemployment rate for people aged 16 and over rose to 4.4% in the three months to November from 4.3% in the three months to October, highlighting some evidence of a cooling job market.

The latest developments are likely to complicate the situation for Chancellor Rachel Reeves after turmoil in financial markets earlier this month, with warnings that rising borrowing costs could require higher taxes or Cut spending to prevent her from violating fiscal rules.

The central bank will watch these data closely and consider whether to cut interest rates on February 6 from the current level of 4.75%. Expectations for a rate cut have risen after last week's better-than-expected inflation data, but experts have warned that strong wage growth could push up prices.

Threadneedle Street is monitoring the UK jobs market for evidence of inflationary pressures, amid concerns that strong wage growth could lead to companies raising prices to accommodate rising wage bills.

Several central bank policymakers warned that wage growth remained above levels considered consistent with its 2% inflation target. Others say the generous pay deal is unlikely to last much longer as the recent period of high inflation passes and Britain's economic growth slows.

According to the ONS, the number of job vacancies fell by 24,000, marking the 30th consecutive month of decline. However, the number of job openings is still higher than before the pandemic.

Business leaders warned that Reeves' plan to increase employers' national insurance contributions by £25bn and raise the minimum wage by 6.7% from April could stoke inflationary pressures.

Work and Pensions Secretary Liz Kendall said: “Today’s figures are further evidence that we must keep Britain functioning, which is why this government remains relentlessly committed to increasing opportunities and reducing barriers to success across the country. .

“As real wages continue to rise, we are working hard to lift living standards and boost economic growth as part of our program of reform, by revamping job centres, uniting decentralized local support and ensuring every young person has the opportunity to earn or learn. "

The Bank of England has been grappling with the quality of Britain's official jobs market statistics, which experts warn can lead policymakers to "blind" into thinking decisions are based on flawed data.

The Office for National Statistics admitted last month it might take until 2027 to replace its flawed labor force survey, which has been marred by low response rates and a mishandling of transformation plans.