UK employees see low wage growth
12/05/2015
UK employees should expect to see a wage growth of only 1.8% in the coming year, a reduction in the 2.0% that was predicted three months ago.
A survey of personnel managers from the Chartered Institute of Personnel and Development (CIPD) shows how Britain’s strong economic recovery has yet to make a big difference to income for most workers.
The reason for the slow rise in wages is due to a combination of low levels of people switching jobs, migrant workers and welfare claimants joining the Labour market; and older workers staying in work for longer.
Even though business investment has grown, spending on training and development has fallen, meaning the hope of productivity improving, and in turn effecting wages, has fallen.
Gerwyn Davies, a labour market analyst at 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.
"In addition, word has spread that inflation is expected to remain very low this year so it's no surprise that many employers are hitting the pause button on pay,"
Official data released on Wednesday is set to show that wages have grown by 1.7% in the first quarter of 2015.
The Bank if England has taken the slow growth in wage growth as an indication to keep interest rates at their record low level of 0.5%.
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
The Autumn Statement – how does it affect you?
The Chancellor, George Osbourne, today gave the annual autumn statement highlighting a wide range of economic issues, and we look at how these could affect you. The first point concerns the economy as a whole. As most of you will know we have just emerged from the double-dip recession that has been affecting the UK industry since 2007, after a period of small growth in the last quarter. However...
Read MoreUS economic indicators turn upwards
News that the speed at which the US economy has been shrinking began to slow in April saw Wall Street surged by over 2% in early trading. This is the latest positive indicator from the US economy which has been very volatile over the last few months to say the least. However, investors should be wary of taking one figure in isolation as evidence that the economy is recovering because last week we...
Read MoreLegal aid and NHS database project under threat
In a prime example of how the UK government is stuck between "a rock and a hard place" with regards to future funding, buried deep in the pre-budget report were plans to reduce investment in legal aid and the NHS database project, which is the largest public sector project anywhere in the world. Despite repeated denials that frontline public sector services would be hit, it seems Alistair Darling...
Read MoreUK government deficit increasing by £3 billion a week
As we approach the end of 2009 the government forecast of a budget deficit for 2009 of £175 billion looks now to be dead in the water. Recent figures show that the budget deficit is now increasing by £3 billion a week and the UK government is in severe trouble as we approach the next general election. Despite the fact that Gordon Brown has pledged to half the budget deficit within four years thi...
Read MoreGDP growth prospects cheer UK businesses
Strong prospects for UK economic growth during 2007 has left businesses feeling upbeat, a survey shows.High street bank Lloyds TSB's latest monthly business barometer, published today, shows an increase in the number of firms claiming conditions are set to improve.Sixty-nine per cent said their business activity would rise in the next 12 months, compared t to 62 per cent in February's poll.Sustain...
Read More