UK employers plan only modest pay rises, easing BoE inflation worries

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LONDON, Nov 15 (Businesshala) – British private sector employers expect to increase employee wages by an average of 2.5% over the next 12 months, well below the likely rate of inflation, according to a survey by the Bank of America. can ease the worries of the bank. England about the risk of a pay-price spiral.

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Quarterly data from the Chartered Institute of Personnel and Development (CIPD) showed that companies were only taking cautious steps to fight rising recruitment difficulties.

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The CIPD said the average annual wage settlement, which private sector employers plan to offer between September 2021 and the same month next year, rose to 2.5% from 2.2% in its last quarterly survey, as of the summer of 2019. Most since.

The BoE has said it is watching the labor market closely as it considers whether to raise interest rates from their all-time, coronavirus-emergency low.

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The BoE predicted this month that consumer price inflation will hit around 5% in the second quarter of next year.

Public sector employers planned a 1% pay hike, but the CIPD said a survey of more than 1,000 employers took place before Finance Minister Rishi Sunak announced last month that there would be more widespread wage hikes in the public sector.

CIPD said the proportion of employers reporting difficult-to-fill vacancies had increased from 39% in its previous quarterly survey to 47%, while those at work since the survey began in its current form in late 2012. The intentions to keep were the strongest.

In contrast, a separate survey of 1,400 British businesses by Accenture and IHS Markit also released on Monday showed hiring intentions had fallen from the record highs seen four months ago, as hiring businesses seemed difficult.

Nevertheless, the hiring plan was still his second strongest since June 2015.

Overall business confidence fell to a 12-month low due to supply chain difficulties and record inflation expectations. But confidence by historical standards was still high and higher than in continental Europe.

Britain has faced widespread labor shortages in sectors such as truck driving, food processing and hospitality, and official data shows a record number of job vacancies.

But there is little evidence that this is translating into a massive increase in wages. The CIPD said 47% of employers reported increasing pay in the past six months to attract employees, while 44% retrained existing employees.

“Employers have a relatively long tail who can do more to attract and make full use of available workers,” said Gervin Davis, senior labor market advisor at CIPD. (Reporting by David Milliken Editing by William Schomberg)

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