According to a recent survey by the Chartered Institute of Personnel and Development (CIPD), British in hiring positions who would raise pay are at the lowest rate since 2013, thereby signalling more bad news for British households already dealing with the pressure of increased inflation since the 2016 Brexit decision.
Anticipation is that the average company plans to increase basic pay for the next year by 1.0 percent, which is lower than the 1.5 percent in the prior quarter’s poll, CIPD reported.
The Governor of the Bank of England (BoE), Mark Carney, in an advisory to residents last week, said citizens were in for difficult times, as their paychecks were going in a negative direction in relation to adjustments for inflation.
Various factors, including the cost of energy going up, inflation rising, and the pound taking a dive following the Brexit voting result, nearly wiped out pay increases for the British worker during three months prior and inclusive of February 2017, according to the government’s presentation of information in April 2017.
In a move to placate the Labour Party, her party’s opposition, Prime Minister Theresa May will reportedly be proposing an extension of the rights of workers as the Brits standard of living is a hot button issue impacting the June 8, 2017, election.
So while the BoE may hope for reliable gains in the economy, whether that happens or not in the upcoming years depends on the proliferation of pay rising up in a significant way, and the CIPD poll indicated that industries are not planning to raise monies earned now.
CIPD’s labour market adviser, Gerwyn Davies, posted that the lack of stronger wages has highlighted, in part, Commonwealth businesses’ long-term problems with low productivity. He further stipulated that he sees the quality of living dropping for a lot of workers in the coming year.
“This could create higher levels of economic insecurity and could have serious implications for consumer spending, which has helped to support economic growth in recent months,” Davies stated.
The BoE’s regional agents’ write-up, as well as a recent Recruitment and Employment Confederation (REC) poll, have shown a lack of motivation to bring forth higher wages.
In addition, the government placed a ceiling on most public sector basic pay raises, following an increase moratorium of three years, at one percent in the year 2013.
Information given by the CIPD showed that as opposed to the public sector, the private stayed at 2.0 percent although the voluntary sector lost strength.
However, the poll indicated that there will still be a rise in employment, growing in the second quarter, even though it will be at a slower pace that at the beginning of 2017.
Reuters had interviewed economists recently in advance of the government’s official monthly publication of labour market information. They said there would be a rise in earnings by week (not including bonuses) and that they were maintained at 2.2 percent prior to three months to March.