Saturday, September 18, 2021
Finance

UK workers’ high pay awards unlikely to continue

British-workers

Employers increased annual pay awards in the second quarter to an average of 2% from 1% in the first quarter

British workers received higher pay awards in the April-June period than in the first three months of the year but the acceleration is unlikely to continue, a survey by human resources data provider XpertHR showed on Thursday.

Employers increased annual pay awards in the second quarter to an average of 2% from 1% in the first quarter. But the figure for the three months to June was in line with rises seen in the three months to May and April, which suggested that pay rises had peaked, XpertHR said.

The Bank of England (BoE) is watching for signs of higher inflation feeding into wages as it weighs up when to start tapering the stimulus programme it rolled out last year to help support the economy during the coronavirus crisis.

Many employers are struggling to fill vacancies and official measures of pay growth have increased in recent months.

Organisations are understandably still being cautious in their approach to annual pay reviews, and whilst we have seen some growth from the awards made in the early months of the year, we are unlikely to see this level of acceleration continue, XpertHR pay and benefits editor Sheila Attwood said.

Despite this, it is still encouraging to see the proportion of pay freezes decline in 2021 as confidence returns, she said.

XpertHR said food manufacturers, chemical companies and retailers recorded the highest pay awards in 2021 so far.

The value of pay awards in the public sector declined for the first time in nearly three years, dropping to 2.3% for the 12 months to the end of June 2021 from its recent average of 2.5%.

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