LONDON – British employers offered annual pay settlements of 2.2% in the three months to the end of November, up slightly from three months earlier but still well below the pace of inflation, industry data showed on Thursday.
Human resources data company XpertHR said there were signs of pay pressure with median settlements the highest since June 2020 and up from the 2.0% recorded in the three months to the end of August.
Pay freezes were much rarer than last year and the top quarter of pay awards were for a rise of at least 3%.
However, the increase is far below the 5.1% increase in consumer price inflation recorded for November and a 7.1% rise in retail price inflation which trade unions often use as a basis for wage bargaining.
“The rise in the median basic pay award could be the first sign of the pay pressure that we expect to see in the months ahead,” said Sheila Attwood, pay and benefits editor at XpertHR.
“High inflation rates pushing up the cost of living and labour shortages are putting pressure on employers to increase wages to attract and retain workers,” she added.
The Bank of England has been looking closely at pay pressures ahead of its December interest rate decision, due to be announced at 1200 GMT on Thursday.
Separate data from the Chartered Institute of Personnel and Development (CIPD) last month showed private-sector employers expected to raise staff pay by 2.5% in the 12 months to the end of September 2022, the biggest rise since 2019.
(Reporting by David Milliken; Editing by William Schomberg)