It follows the cooling of annual growth of earnings during the previous three-month spell, according to the Office for National Statistics (ONS).
When inflation is taken into account, wages increased by 0.9% including bonuses and 1.9% excluding them.
Total earnings for the UK also grew to 3.8%, but this is due to one-off payments made to the NHS and civil service in 2023.
The ONS insists the details are estimates as “it is not possible to survey every business each month”.
The data has sparked expectations that the next Bank of England base rate will fall from its current 5% rate. In November, the Monetary Policy Committee (MPC) will vote on what the base rate will be.
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Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Worrisome wage growth is in retreat, lifting expectations that borrowing costs will soon fall further.”
The finance expert added that due to the pound falling behind the dollar since the wage data was published, there “is an indication of the firming up of expectations of a rate cut in November, with another follow-up reduction likely in December too.”
Lindsay James, investment strategist at Quilter Investors, said: “Wage growth has been a persistent challenge for the Bank of England. Although it is moving in the right direction, the pace remains well above the bank’s 2% inflation target.
“This morning’s figures indicate that average regular earnings are rising by 2.7% in real terms. While wage growth isn’t falling as quickly as the bank might like, the fact that it hasn’t increased suggests we might see a further base rate cut on 7 November.”
James added: “Labour’s first Budget will also take place before the bank’s MPC meeting, so the bank will closely monitor market reactions and potential economic impacts.
“Though we could see another rate cut at the next meeting, it is seeming increasingly likely that the Bank of England will continue on its ‘slow and steady’ path, with a 0.25% cut at most.”
Unemployment at 4%
In terms of jobs in the UK, unemployment stood at 4%, which is lower than the estimates of 12 months ago.
The total number of payrolled employees (for people aged between 16 and 64) fell by 0.1% from July to August, amounting to 35,000 jobs.
The UK economic inactivity rate (for people aged 16-64 years) was estimated at 21.8% in the same time frame, under the estimates of a year ago, and it decreased in the latest quarter.
On the employment side of things, Jane Gratton, deputy director of public policy at the British Chambers of Commerce, said: “With vacancies continuing to fall and the pace of wage rises slowing, it would appear there are further signs of the labour market loosening.”
Gratton added: “Firms are worried the Autumn Budget might lead to a higher tax burden – particularly a potential increase in National Insurance contributions – and that the Government’s new employment reforms could increase costs.
“There are two key issues the Chancellor must address to boost employment and help keep momentum in the economy. First is to help the long-term sick back into work, and second is to plug the gaps in local training provision.
“We want a reduction in the employer and employee tax on workplace health services so more people can get tailored support more quickly.”
