Top Stories
UK employers see slight fall in pay awards over 2023 – XpertHR
Global Banking & Finance Review®
Company
By Suban Abdulla
LONDON (Reuters) – British employers expect pay settlements over 2023 as a whole to average 5%, down slightly from the 32-year high of 6% recorded during the three months to the end of February, new industry data showed on Wednesday.
“Our forecast indicates that pay awards may have reached their peak and will settle throughout the course of the year,” said Sheila Attwood, senior content manager at XpertHR.
The forecast is based on a survey of 266 organisations which employ a total of more than 300,000 staff.
If pay growth has peaked, this will be welcome news for the Bank of England, which is concerned that double-digit inflation will be harder to tame if pay awards keep growing.
However, nearly all employers noted pressure to increase pay deals, with the majority citing inflation, labour shortages and the need to offer competitive pay.
Pay awards in the three months to the end of February averaged 6%, unchanged from the three months to the end of January and the joint highest since September 1991, according to XpertHR’s analysis of 198 pay awards covering 450,000 staff.
XpertHR said the rising national living wage, which will increase by 9.7% next month for people aged 23 and over, was also putting upward pressure on pay deals.
Pay awards remain well below the rate of inflation. Consumer price inflation has fallen slightly since it hit a 42-year of 11.1% in October last year, and was 10.1% in January.
The country’s budget forecaster, the Office for Budget Responsibility (OBR), last week forecast inflation would fall to 2.9% by the end of 2023, but added Britain remained on track for a record fall in living standards over the two years to March 2024.
February inflation data is due at 0700 GMT on Wednesday and is forecast to show a fall to 9.9%. A narrow majority of economists polled by Reuters expect the BoE to raise its main interest rate on Thursday to 4.25% from 4%.
(Reporting by Suban Abdulla; editing by David Milliken)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is often measured by the Consumer Price Index (CPI).
Pay awards refer to the increases in wages or salaries that employers grant to their employees, often influenced by factors like inflation and market conditions.
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, maintaining monetary stability, and overseeing the financial system.
The national living wage is the minimum wage that must be paid to workers aged 23 and over in the UK, aimed at ensuring a basic standard of living.
Consumer price inflation measures the average change over time in the prices paid by consumers for a basket of goods and services, reflecting the cost of living.
Explore more articles in the Top Stories category
