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Monday, November 2, 1998 Published at 12:56 GMT


Business: The Economy

No wages data - official

Wages are not rising as fast as previously thought

The Office of National Statistics (ONS) has said it is suspending the publication of average earnings figures until it can be sure they are accurate.

These data are amongst those most closely watched by the Bank of England to detect inflationary pressures.

Tim Holt, director of the ONS, said: "Public confidence in this particular series has clearly been dented."

The next set of average earnings figures had been scheduled to be published on November 11 along with the unemployment figures.

Major revisions

Last month the ONS was forced to revise the average earnings figures twice.

The new data appear to show that wages have been growing much less quickly than was originally thought, easing inflationary pressures.

They also show that the jump in average earnings in the spring, which prompted the Bank of England to make a surprise increase in interest rates, may not have happened.

One city analyst said that the revisions "effectively rewrote recent economic history." And a Treasury official commented: "If the Bank had kept interest rates on hold because of these figures it would have been the Gordon Riots all over again" - when a mob attacked the Bank of England in 1790.

High level review

The seriousness of government concern was indicated last week when the Chancellor, Gordon Brown, set up a high-level panel to conduct an independent review of the problem.

Joining Professor Ray Chambers of Southampton University will be the Permanent Secretary of the Treasury, Andrew Turnbull, and the Deputy Governor of the Bank of England, Mervyn King. Martin Weale, Director of the National Institute for Economic and Social Research, has also been consulted.

They expect to report in four to six weeks.



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