The spectre of yet another Bank of England base rate rise next week has been increased by economic figures released in the past 24 hours.

Data from the Office for National Statistics shows average earnings in the three months to July up 8.5 per cent on the year, just as annual inflation slowed to 6.8 per cent; this means wages have pipped inflation for first time in nearly two years.

However, the unemployment rate went up and job vacancies fell again. The unemployment rate rose to 4.3 per cent in the three months to July from 4.2 per cent a month earlier, and job vacancies fell to below a million.

A new inflation figure – expected to be lower – is out in the middle of next week before a Bank of England monetary policy committee meeting on Thursday September 21.

Debate amongst Bank of England MPC members is already underway,

Catherine Mann, a committee member, has signalled she will back a further base rate rise because of inflation worries. 

Mann says: “The risk of tightening too little is more salient … holding rates constant at the current level risks enabling further inflation persistence, which will have to be unwound eventually with a worse trade-off. The longer this overshoot [of inflation running beyond the 2.0 per cent target] is allowed to continue, the more likely a departure from the old ‘low inflation, low volatility’ steady state. I would rather err on the side of over-tightening.”

However the BoE governor Andrew Bailey and Sir Jon Cunliffe, outgoing deputy governor for financial stability, told MPs last week that they believed rates were now near their peak.