January 24, 2019
LONDON (Reuters) – British employers have offered staff the biggest pay rises in 10 ten years in early 2019, a survey of companies suggested on Thursday, adding to signs that historically low unemployment is beginning to translate into faster wage growth.
Annual wage deals agreed this month stood at a median 2.8 percent, compared with awards of 2.0 percent in December, according to preliminary figures collected by pay data firm XpertHR.
Official data on Tuesday showed British workers’ pay grew at the fastest pace in over 10 years, up 3.4 percent, contrasting with other signs of an economic slowdown ahead of Brexit, as unemployment holds at its lowest rate since the mid-1970s.
“Despite the uncertainty surrounding Brexit outcomes, the first pay awards of 2019 are moving in a very positive direction,” XpertHR pay and benefits editor Sheila Attwood said.
XpertHR’s wage settlement data tends to show slower rates of growth than official data, which also factors in salary increases that workers receive when they change job.
The Bank of England has said it expects pay growth to improve and its chief economist Andy Haldane said in October that there were signs of a “new dawn” for wage increases.
Assuming a relatively smooth Brexit transition, the Bank of England has said it will need to raise interest rates gradually to offset inflation pressures from the labor market.
(Reporting by Andy Bruce, editing by David Milliken)