Record pay rises planned for UK but real wages lag inflation
Matthew Pinto-Chilcott – Owner of Consensus HR comments: “I found this article – Record pay rises planned for UK but real wages lag inflation from US News and the BBC very interesting bearing in mind what is going on in the economy at the moment with high inflation at 10.1 % and the war in Ukraine. Recent statistics show that UK has seen a slight rise in unemployment to 3.6% in the three months to September, up from 3.5 in August 22. The Bank Of England is also expecting unemployment to double by 2025 as we go through an anticipated recession. Employers are going to have to juggle a number of balls to ensure their team are motivated and paid enough to live comfortably whilst inflation is high and that the books balance with good sales, preferably increasing, motivated team members, low sickness and the need to not have to restructure the business due to reducing salaries /’ payroll and headcount.”
UK companies are planning their biggest pay hikes in a decade, but real-term wages will still grow more slowly than inflation, according to the latest quarterly survey from the Chartered Institute of Personnel and Development (CIPD). The survey found that British 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 such increases 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, adding “Rather than feeling the benefit of higher pay, most will face a real-terms pay cut.” The CIPD say the UK’s jobs boom has not yet peaked, with 69% of employers planning to hire in the next quarter.
By Reuters – Nov. 13, 2022, BBC, The Human Times – 15th November 2022