LONDON (Reuters) – British employers were less generous in their pay awards to staff during the three months to October, according to a survey which underscores how gradually many workers’ earnings are rising, despite a sharp fall in unemployment.
The median pay increase given by employers fell to 2.3 percent, down from 2.5 percent in the three months to the end of September, wage data firm XpertHR said on Thursday.
“The latest figures suggest that many firms are still struggling to award higher pay awards than over the past few years to their employees,” XpertHR pay and benefits editor Sheila Attwood said.
Private-sector employers were predicting increases next year would be around 2.4 percent, broadly in line with levels over the past year, she said.
The Bank of England has said it expects pay growth to improve gradually and its chief economist Andy Haldane said last month there were signs of a “new dawn” for wage increases.
The BoE believes rising pay will create inflation pressure and require further, gradual increases in interest rates, even as Britain grows more slowly than many other rich economies because of Brexit.
The central bank has forecast wage growth — as measured by the official average weekly earnings data — of 2.75 percent by the end of this year rising to 3.5 percent at the end of 2020.
Official data for the three months to September showed average weekly earnings excluding bonuses rose at an annual rate of 3.2 percent, their fastest since 2008.
The official figures are based on a wider sample of pay gains for workers, including those employed at smaller firms, and also reflect gains from changing jobs and changes in the number of high and low-paid jobs.
XpertHR – which collects details of pay settlements for around 1,600 employee groups each year – said its survey was based on 57 pay deals covering more than 900,000 employees in the public and private sector.