UK employers are expecting to continue raising pay for staff as they battle to retain people, even as the economy is expected to stutter, according to a survey.
Businesses expect to offer pay rises of up to 5% over the coming year, the highest level since 2012 and sustained from the last two quarters, according to the poll of 2,000 human resources executives by the Chartered Institute of Personnel and Development (CIPD).
More employers also expect to try to retain staff who have said they want to leave with counteroffers - trying to beat offers from elsewhere with pay increases or other perks.
Around 40% of UK employers have made a counteroffer in the past 12 months, the CIPD said, while 38% of employers who made offers matched the salary of the new job offer and 40% offered even higher sums.
The findings suggest the UK labour market remains tight, with unemployment still near record lows at 4% in May, although it did increase more than expected from 3.8% in April.