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UK employees see low wage growth


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%.

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