Survey: UK businesses plan to raise pay by most since 2012 - Reuters

On Monday, a survey conducted by the Chartered Institute of Personnel and Development (CIPD), a human resources professional body, showed that the UK businesses plan to increase the basic wages by the most in seven years, Reuters reports.

Key Findings:

Private-sector employers planned to increase basic pay rates this year by 2.5 percent on average, the most since the survey started in 2012.

Inflation was the top reason given by firms to the CIPD for expecting pay rises greater than 2 percent, raising a question about whether this will be sustained now inflation has fallen below this level.

Recruitment and retention issues and increases in the going rate of pay elsewhere were the other main reasons for raising pay by more than 2 percent.

CIPD economist Jon Boys said: “Productivity is 22 percent lower than it would have been if the pre-financial crisis trend had continued. As a result, pay growth is woefully behind.”

The CIPD said public-sector employers expected average pay rises to drop back to 1.1 percent this year after a temporary rise to 2 percent, which had reflected a more generous settlement for hospital workers and some other staff.

As a result, the overall median wage settlement for employers across the economy remained unchanged at 2 percent.”