UK Pay Settlements Hold at 3.5% Despite Minimum Wage Increase, Survey Finds
Survey Results and Implications for UK Pay Growth
LONDON, June 8 (Reuters) - Pay settlements awarded by British employers held steady in the three months to April despite an increase in the country's minimum wage, according to a survey that was published the week before the Bank of England's interest rate decision.
Incomes Data Research said on Monday that the median pay rise awarded by major employers was 3.5% in the February to April period, the same as in the three months to March.
Bank of England's Focus on Pay Growth
The BoE, which is expected to leave interest rates unchanged at 3.75% next week, is monitoring pay growth as it gauges inflation pressures in the economy, which investors view as very exposed to higher energy prices caused by the war in Iran.
Key Findings from the IDR Survey
Trends in Pay Awards
IDR survey also showed:
Proportion of Firms Offering Higher Pay Rises
• The proportion of firms offering pay rises of 4% or more rose to 33% in April from 21% in March, reflecting bigger pay rises in engineering, energy and water companies
Impact of Minimum Wage Increase
• IDR said April was a month with higher pay awards as the minimum wage rose by 4.1% to £12.71 ($17.11) an hour for those aged 21 and over
Sector-Specific Pay Awards
• Pay awards in private services sector fell to 3.3% from 3.5% in March, though there were bigger increases in retail and hospitality jobs paid close to the minimum wage
Survey Scope and Coverage
• The survey was based on 166 awards between February 1 and April 30 which covered more than 3.3 million workers
Exchange Rate Reference
($1 = 0.7428 pounds)
Reporting Credits
(Reporting by Suban Abdulla; editing by David Milliken)
