Provisional figures for April showed a median annual pay award of 4 per cent, up from 3 per cent in the first three months of 2022
British employers are starting to offer the biggest annual pay rises since 2008, but the increases are still not keeping up with fast-rising inflation, human resources data company XpertHR said on Wednesday.
Provisional figures for April – when almost half of British pay deals take effect – showed a median annual pay award of 4 per cent, up from 3 per cent in the first three months of 2022.
XpertHR is the UK’s leading human resources firm which supports businesses to develop their HR and people strategy.
We see a notable upturn in pay settlements for this month, XpertHR’s pay and benefits editor, Sheila Attwood, said.
The Bank of England is eyeing wage deals closely ahead of its May policy meeting, which economists expect will see it raise interest rates by a quarter point to 1 per cent, their highest since 2009.
In February a Bank of England survey of businesses suggested pay settlements this year would average nearly 5 per cent – a level which some Bank of England policymakers feared could lead to high inflation becoming entrenched in the British economy.
XpertHR said pay settlements have increased since last year – when they averaged just 1.2 per cent in the three months to March 2021 – but inflation has risen far more steeply.
It said the gap between pay settlements and retail price inflation was the widest since its records began in 1984.
RPI – an older measure of inflation still used in many pay negotiations – hit 9 per cent in March, while consumer price inflation – the newer measure targeted by the Bank of England – rose to a 30-year high of 7 per cent.