The prospects for an interest rate cut next month have not been helped by the latest wage growth figures which have come in higher than expected.

Data from the Office for National Statistics (ONS) showed regular wage growth, excluding the effects of bonuses, was 6% higher over the three months to March compared with a year earlier.

That was no lower than the sum reported the previous month.

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The ONS reported that total pay was also static, at an upwardly revised 5.7% for the period.

Economists had been expecting declines in both readings.

The data also showed a rise in the unemployment rate from 4.2% to 4.3%.

ONS director of economic statistics Liz McKeown said: “We continue to see tentative signs that the jobs market is cooling, with both employment from our household survey and the number of workers on payroll showing falls in the latest periods.

“At the same time, the steady decline in the number of job vacancies has continued for a twenty-second consecutive month, although numbers remain above pre-pandemic levels.

“With unemployment also increasing, the number of unemployed people per vacancy has continued to rise, approaching levels seen before the onset of COVID-19.

“Earnings growth in cash terms remains high, with the recent falls in the rate now levelling off while, with inflation falling, real pay growth remains at its highest level in well over two years.”

The figures were released against a backdrop of intense speculation on the timing of a Bank of England interest rate cut.

The Bank, which last week signalled further progress in efforts to bring down inflation, has held the rate at 5.25% since last summer.

The rate-setting committee wants to see a “sustainable” return to its 2% inflation target before imposing the first cut.

Wage growth has been among the stubborn factors of concern.

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Interest rate cut is not far off – but there are complicating factors

The Bank feels that the pace, currently around double the rate of price growth, risks fuelling a second round of inflation because more discretionary spending could result in higher prices.

Its chief economist Huw Pill later said in a speech that the pay growth rates remain “quite well above” what would be consistent for meeting the target sustainably.

Inflation figures out next week, which cover the month of April, are tipped to show a sharp easing in the main consumer prices index (CPI) measure, largely due to plunging energy bills.

A figure just above 2% is forecast by economists.

The Bank has resisted the temptation to cut borrowing costs as it believes that figure could shift back up towards 3% in the second half of the year.

Financial markets saw a 53% chance of a rate cut on 20 June – the monetary policy committee’s (MPC’s) next meeting.

While restrictive monetary policy was largely blamed for the UK’s recession during the second half of 2023, the economy has since performed better than expected.

That complicates the picture for the MPC.

Separate ONS data last week showed a 0.6% rise in gross domestic product during the first quarter of the year.

As with the wage figures, the Bank will be anxious that a growth spurt risks fanning the flames of inflation.

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Policymakers have said their decisions will be data dependent.

There is a further employment report due from the ONS ahead of 20 June and two sets of inflation figures between today and that date.

Yael Selfin, chief economist at KPMG UK, said of the rate cut prospects: “Next month will be key in terms of pay data as it will provide initial evidence of the impact of April’s National Living Wage increase.

“If it comes in line with our expectations of only a modest boost, and sufficient to keep annual pay growth on a downward trajectory, this could ignite more dovish sentiment on the MPC ahead of their June vote.”

Rob Wood, chief UK economist at Pantheon Macroeconomics, believed the Bank would back a rate cut at its next meeting.

“Much as we have concerns over the jobs data, the labour market keeps gradually easing, and they give the MPC a hook to hang a June rate cut on,” he wrote.

There are at least three things Joe Biden’s new tariffs on Chinese goods are intended to achieve.

Interestingly enough, preventing Chinese goods from entering the United States (typically the main purpose of tariffs) is arguably the least important of them.

That’s because the most eye-watering of all the new tariffs – a 100% rate on electric vehicles – is being imposed on a category where China doesn’t really compete all that much. Consider: last year the US imported nearly $19bn worth of electric cars. Of those imports, a mere $370m came from China – less than 2% of the total.

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That’s not to say that China is not already a world leader when it comes to making electric cars.

Right now a large chunk of electric cars being bought in Europe and elsewhere besides are Chinese. You might even be driving one today, because most of the Chinese cars being sold on these shores don’t actually have Chinese badges – like BYD. If you have a Tesla Model 3, a Tesla Model Y, an MGs or a Polestar… you’re driving a Chinese car.

Back when cars were all about their internal combustion engines, China never used to be a motoring manufacturing powerhouse. But thanks in large part to enormous support packages, China has achieved dominance of electric car manufacture.

It has done so in part because it has invested so much not just in making those cars but, even more importantly, in making the batteries inside them – not to mention the chemicals and minerals that go inside those batteries. Look at the global electric vehicle business and China has dominance all the way down the supply chain.

It’s a similar story in much of the green technology sector. China makes the vast majority of the world’s solar panels. It’s staking out a leading position in making wind turbines, not to mention green hydrogen electrolysers and carbon capture technology.

This helps explain why the tariffs announced by the White House today are not just focused on electric cars.

There will also be a doubling of tariffs on solar panels to 50%, as well as further tariffs on steel and aluminium. The justification for the latter two is that Chinese steel and aluminium is produced with more carbon emissions than elsewhere.

They are part of a broader Biden strategy. Many assumed there would be a big shift in economic diplomacy when Mr Biden took over from Donald Trump, and that he would rescind the tariffs and rules the Trump White House imposed on Beijing.

However in reality, the Biden White House has, if anything, doubled down. They have introduced a host of new subsidies on the production of green technology (the Inflation Reduction Act) and semiconductors (the CHIPS Act), fighting China at its game.

The back story here is that the world is on the brink of a new industrial revolution. As countries around the globe push towards net zero, it necessitates a panoply of new industries – to provide the green energy and cleaner products necessary to hit that goal. And the US is determined not to allow China to win the race to build out these new industries. Hence why the White House is now going one step further with tariffs.

Economists dislike tariffs. They fret about what happened in the 1930s, when the global economy slid into depression as countries around the world followed “beggar-thy-neighbour” policies of ever-increasing tariffs. They fear this might happen again, and, frankly today’s tariffs from the White House probably make such an outcome more likely.

So why is this administration, whose Treasury Secretary Janet Yellen is hardly what you’d call a radical economist, going to such lengths? That brings us back to the other two things these new tariffs are intended to achieve.

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The first is to do whatever it takes to give the US a fighting chance at competing with China at producing electric cars and solar panels. Today’s measures might be construed as a tacit admission that the subsidies in the Inflation Reduction Act aren’t helping enough in and of themselves. Whether these tariffs help anymore is an open question. China’s lead is extensive. But we’re about to find out what happens when the world’s two economic superpowers pull out all the stops to compete with each other.

The final reason for these tariffs is more prosaic – but it might actually be the most important of all (at least for Mr Biden himself). They are intended as a political message to show how tough he is on China, and to outdo Donald Trump himself. These tariffs are aimed as much at appealing to the American electorate ahead of the election as they are to affect trade with China.

Nonetheless, they will doubtless provoke some tit-for-tat tariffs from China. Trade – and industrial strategy – have never been so dramatic, or interesting.

The new version of the ChatGPT AI chatbot has been unveiled and offers near-instant results across text, vision and audio, according to its maker.

OpenAI said it was much better at understanding visuals and sounds than previous versions.

It offers the prospect of real-time ‘conversations’ with the chatbot, including the ability to interrupt its answers.

The firm says it “accepts as input any combination of text, audio, and image and generates any combination of text, audio, and image outputs”.

GPT-4o is to be rolled out over the next few weeks amid a battle by tech firms to develop ever-more advanced artificial intelligence tools.

Monday’s announcement showed tasks such as real-time language translation; using its vision capability to solve a maths question on a piece of paper, and to guide a blind person around London.

GPT-4o can respond to audio in as little as 232 milliseconds, with an average of 320 milliseconds, which the company says is similar to human response time.

To try to ease concerns over bias, fairness and misinformation, the Microsoft-backed company says the new version has undergone extensive testing by 70 external experts.

It comes after Google earlier this year had a major PR blunder over images generated by its Gemini AI system.

GPT-4o model will be free, but premium ‘Plus’ users get a greater capacity limit for messages.

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Previous versions of the chatbot have caused unease in schools and universities due to some students using it to cheat by producing convincing essays.

When it launched two years ago, ChatGPT was said to be the fastest-ever app to reach 100 million active monthly users.

The announcement also stole a march on Google, which is expected to tomorrow show off its own new AI features at its annual developers’ conference.