Key figures released today by the Australian Bureau of Statistics show wages growth slowed in the March quarter, in a result that has surprised economists and promises to relieve upward pressure on interest rates.

The ABS’s Wage Growth Index rose by just 0.9 per cent, down marginally on the December quarter’s rise of 1.1 per cent.

The dip came despite the current strong labour market across Australia.

Senior Macquarie economist Brian Redican said that although the labour market remained tight, it was not uniform across all industries and that had helped dampen wages growth.

The current mining boom has caused wages to surge by as much as 5.9 per cent this year in Western Australia, but Mr Redican added that other sectors of the economy were suffering because of high interest rates and the soaring value of the Australian dollar.

Meanwhile, with rapid wage growth linked to rising inflation, Senior Strategist at TD Securities Joshua Williamson, said that today’s surprising result suggested that the Reserve Bank could now be a little more tolerant in its interest rate decisions.

Mr Williamson gave heart to struggling homeowners, saying today’s Wage Index growth was a good result for monetary policy. He said the number could even put a little downward pressure on interest rates, moving into the second half of the year.