UK Wage Survey Points to Stagnation

Starting salaries are expected to remain low for the rest of the year after a wide ranging jobs survey found only 2% of employers handed an above-inflation pay rise to new recruits in the last year.

Only 20 out of 1,000 employers said they had paid a significant rise to new workers, adding to concerns that a surge in job creation over the last 18 months and skills shortages have failed to increase take-home pay.

The survey, by the Chartered Institute of Personnel and Development (CIPD), is likely to make a significant contribution to the debate over wages growth, which official data on Wednesday is expected to show stagnated in June.

A majority of City economists believe figures from the Office for National Statistics could even reveal a fall of 0.1% in wages. Most analysts have dismissed the ONS’s figures, arguing they are skewed by a sharp rise in bonuses last year following the cut in the top rate of tax to 45p. They point to surveys showing workers have received pay rises worth between 2% and 2.5% in some sectors, reflecting staff shortages in some industries.

When it publishes its latest inflation report, also due on Wednesday, the Bank Of England is expected to take the ONS figures on board and downgrade its forecast for average wage rises, which it previously forecast would hit 2.5% this year.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza