Pressure on the Bank of England to introduce a second cut in interest rates as early as next month increased today as official figures showed average earnings had increased at a slower than expected rate over the past three months.

Annualised average earnings before bonus payments increased by 3.6 per cent, according to National Statistics. This is 0.1 per cent lower than last month's figure and comfortably within range of the Bank's target, economists said.

Record employment figures and a fresh all-time low in the benefit claimant count also took the heat off the Bank to cut the cost of borrowing when it meets in January.

The total number of jobs in the UK reached more than 31 million, with the number of vacancies increasing by more than 680,000, National Statistics said.

Some 11,100 fewer people claimed jobseeker's allowance in November, it said. At 813,000, the figure is the lowest since 1975 and the 14th consecutive month where it has fallen.

"The very benign average earnings data for November should go down well at the Bank of England, as it has expressed concern that some measures of pay growth have picked up recently," Howard Archer, the chief UK and European economist at Global Insight, said.

Mr Archer said that the figure for average earnings was "substantially below the 4.5 per cent level considered consistent with the Bank of England's 2.0 per cent target for consumer price inflation. Despite a further tightening in the labour market, there still appears to be sufficient slack to limit workers' bargaining power."

The Bank's rate-setting Monetary Policy Committee cut interest rates for the first time in two years last week amid fears that a collapse in consumer confidence would prompt a slump in economic growth.

Borrowing costs were reduced by 0.25 per cent to 5.5 per cent amid expectations that at least one more cut will come during the early part of next year.

Some economists are predicting that interest rates could fall to as low as 4 per cent as the Bank strives to keep inflation to its 2 per cent target.

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