Outlook for UK wage growth still bleak despite rising job prospects

Kasmira Jefford
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Employers are still not under pressure to raise salaries (Source: Getty)
Job prospects are improving but UK wage growth is likely to remain weak this year as companies continue to find no shortage of employees to recruit at current pay levels, the professional body for HR managers warned today.

The Chartered Institute of Personnel and Development (CIPD), said falling inflation together with low job turnover and an increasing number of migrants, older workers and welfare claimants entering the market meant employers were still not under pressure to raise salaries.

Its latest quarterly labour market outlook, which surveys over 1,000 UK employers, shows basic pay is expected to grow by just 1.8 per cent in the coming year, down from two per cent in the previous quarter and still well below pre-recession levels.

Gerwyn Davies, a labour market analyst for the CIPD, said: “The new government may be inheriting a strong labour market but people’s pay packets are only seeing very modest improvements, if at all.”

Meanwhile Lloyds Bank’s regional purchasing managers’ index (PMI), out today, shows business activity kept up the pace in April despite falling to 58.5 from March’s seven month high of 59.

Growth of new work was also strong despite falling from 59.4 to 58.1.


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