LONDON (Reuters) – Increases in pay settlements offered by British employers have remained at their highest since 2008 but continue to lag behind inflation, according to data published on Tuesday that will be scrutinised by the Bank of England.
The median pay award rise in the three months to the end of February held at 3%, the joint highest since December 2008 when it was 3.6%, human resources data company XpertHR said.
Britain’s consumer price index rose by 5.5% in the 12 months to January and it is expected to surpass 8% soon.
The BoE fears accelerating prices will drive up pay to a level that will make it hard to get the CPI back to its 2% target. Last month, Governor Andrew Bailey urged workers to show restraint in pay talks.
Sheila Attwood, XpertHR pay and benefits editor, said the recent increases showed employers were trying to react to rising inflation and contending with labour market shortages.
“But what would have been a reasonably high pay increase a year ago, global pandemic aside, now feels inadequate,” she said.
The data covered 230 settlements affecting more than 268,000 employees.
Only 3.5% of the sample saw a wage freeze, compared with 34% this time a year ago when Britain’s economy was yet to emerge from its series of COVID-19 lockdowns.
A separate survey of 303 organisations conducted by XpertHR showed companies expected a median pay award of 3% in 2022, with 40% of awards worth 4% or more.
UK pay settlements hold at highest since 2008 – XpertHR
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