Britain’s labour market showed fresh signs of cooling in August as payroll employment fell again and the pace of wage growth slowed, according to official figures. Average weekly earnings excluding bonuses grew by 4.8%, down from 5%, while pay including bonuses rose 4.7%. Economists and the Bank of England track wage data closely as a key driver of inflation. Market pricing suggests they could stay on hold for the rest of 2025, with policymakers signalling they are prioritising the fight against inflation despite evidence of a cooling jobs market. Inflation data due on Wednesday is forecast to show annual price growth of between 3.8% and 3.9% in August, nearly double the Bank’s 2% target.