UK employers are planning the biggest pay hikes in a decade to fill roles but real-term wages will still grow more slowly than inflation, a survey showed on Monday.
The quarterly survey by the Chartered Institute of Personnel and Development (CIPD) found employers expect to raise their basic pay rates by 4% on average over the coming year, and by as much as 5% in the private sector – the largest since the CIPD’s records started in 2012.
“Pay awards are expected to rise by the highest amount we’ve seen in our survey for 10 years but it’s being outpaced by rising prices,” CIPD labour market economist Jon Boys said. “Rather than feeling the benefit of higher pay, most will face a real-terms pay cut.”
The figures add to concerns from the Bank of England about an overheating labour market and historically rapid wage gains, which many of its officials fear could fuel further inflation that currently stands at a 40-year high of 10.1%.
Britain’s jobs boom has yet to peak, with 69% of employers planning to hire in the next quarter, the CIPD said.