A man works at a computer on a standing desk in an office in the financial district of Canary Wharf in London, Britain, Feb 8, 2023. REUTERS/Kevin Coombs/File photo
LONDON – British employers agreed pay rises averaging 5 percent during the three months to the end of January, well above historic norms, and a tight labor market means pay settlements are likely to remain high, a survey showed on Wednesday.
Incomes Data Research (IDR) said the median pay rise at major British employers had risen from 4.3 percent in the three months to the end of October and 3.4 percent in the first quarter of 2022.
“Such relatively high increases are likely to continue further into 2023 due in part to the influence of the forthcoming uplift in the National Living Wage… but continued tight labour markets and elevated inflation will play a role too,” Zoe Woolacott, senior researcher at IDR, said.
The National Living Wage – a minimum wage rate which does not apply to apprentices or workers aged under 23 – is set to rise by 9.7 percent at the start of April to 10.42 pounds ($12.67) an hour.
The Bank of England is keeping a wary eye on pay growth, as many of its policymakers fear above-average pay rises will slow the fall in inflation, which hit a 41-year high of 11.1 percent in October and remains in double digits.
The IDR report also comes out just hours before finance minister Jeremy Hunt presents his annual budget statement, against a backdrop of strikes from doctors, nurses, transport workers and civil servants who are all seeking bigger pay rises.
IDR said its data mostly reflected private-sector wage deals – especially in manufacturing – as few public-sector wage agreements were reached between November and January. In total, the figures include 75 pay deals covering more than half a million workers.
Some of the biggest pay rises included 14 percent increases for workers at Ford Motor Company and at BMW’s MINI car plant.
Official figures published on Tuesday showed wage growth slowed in the quarter to January with basic pay, excluding bonuses up 6.5 percent compared with a 6.7- percent rise in the three months to the end of December.
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