UK set for most widespread pay rises in over a decade
By David Milliken
LONDON (Reuters) – More British employers are planning pay rises than at any time since the global financial crisis as they struggle to recruit staff following the coronavirus pandemic and Brexit, data from the Confederation of British Industry showed on Monday.
CBI found that 44% wanted to raise their wages in line with inflation while 24% wanted above-inflation increases. It is the largest combined number of respondents since 2009.
Matthew Percival (CBI director of skills, inclusion), stated that pay intentions were rising as businesses reopen and recover.
He warned however that businesses would likely pass higher wages to customers if productivity is not improved. This was especially true since many of them also had to pay back loans they took out during the pandemic.
As its policymakers gather this week, the Bank of England will be concerned by higher prices. Although the BoE is expecting a temporary rise in inflation from higher oil prices and supply chain bottlenecks, so far it has stated that it doesn’t expect any lasting inflationary pressure on the job market.
Only 32% of the 422 businesses polled late August by Pertemps Network, CBI, and other recruiters said they felt that the labour market was suffering. This is the lowest percentage for over 5 years.
CBI reiterated its demand that the government ease restrictions post-Brexit on visas for European Union workers who have in-demand skills.
Manufacturing trade group Make UK also stated that its members are experiencing the fastest growth in output for more than 30 year and expects output to reach pre-pandemic levels before 2022. This is faster than was previously predicted.
As economies open up at home as well as abroad, the growth prospects for manufacturers continue to improve. Stephen Phipson from Make UK said that there are risks to growth. He pointed out that shortages in supply chains and a rapidly rising cost of shipping could be a problem.
Make UK has also criticized a government move to increase employers’ contributions to social security.
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