UK employers see slight fall in pay awards over 2023 - XpertHR
By Suban Abdulla
LONDON, March 22 (Reuters) -British employers expect pay settlements over 2023 as a whole to average 5%, down slightly from the 32-year high of 6% recorded during the three months to the end of February, new industry data showed on Wednesday.
"Our forecast indicates that pay awards may have reached their peak and will settle throughout the course of the year," said Sheila Attwood, senior content manager at XpertHR.
The forecast is based on a survey of 266 organisations which employ a total of more than 300,000 staff.
If pay growth has peaked, this will be welcome news for the Bank of England, which is concerned that double-digit inflation will be harder to tame if pay awards keep growing.
However, nearly all employers noted pressure to increase pay deals, with the majority citing inflation, labour shortages and the need to offer competitive pay.
Pay awards in the three months to the end of February averaged 6%, unchanged from the three months to the end of January and the joint highest since September 1991, according to XpertHR's analysis of 198 pay awards covering 450,000 staff.
XpertHR said the rising national living wage, which will increase by 9.7% next month for people aged 23 and over, was also putting upward pressure on pay deals.
Pay awards remain well below the rate of inflation. Consumer price inflation has fallen slightly since it hit a 42-year of 11.1% in October last year, and was 10.1% in January.
The country's budget forecaster, the Office for Budget Responsibility (OBR), last week forecast inflation would fall to 2.9% by the end of 2023, but added Britain remained on track for a record fall in living standards over the two years to March 2024.
February inflation data is due at 0700 GMT on Wednesday and is forecast to show a fall to 9.9%. A narrow majority of economists polled by Reuters expect the BoE to raise its main interest rate on Thursday to 4.25% from 4%.
Reporting by Suban Abdulla; editing by David Milliken
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.