UK pay rises of 2.5 per cent falls below inflation rate
UK pay rises stayed flat year on year at 2.5 per cent in the three months to May, according to industry data released today.
Employers opted not to increase salary hikes despite rising inflation.
Read more: UK unemployment stays at record lows
In fact, 87 per cent of the 238 pay rises analysed by Xpert HR fell below the retail prices index (RPI) inflation rate, which stayed at three per cent in May.
Meanwhile, 43 per cent of pay rises were lower than they were last year, Xpert HR found.
“Following a dip in the second half of 2018, the first half of 2019 is dominated by pay rises in the region of 2.5 per cent,” Sheila Attwood, Xpert HR pay and benefits editor, said.
“However, pay awards continue to sit half a percentage point below RPI inflation on the May 2019 data.”
The pay rise figure is lower than UK’s latest wage growth statistics released last week, which showed salaries grew 3.4 per cent in the three months to April.
That was close to a decade high of 3.5 per cent recorded at the start of 2019.
However, Xpert HR’s UK pay rises research did not account for job moves.
The Bank of England has predicted that pay growth will slip back to three per cent this year.
However, experts have raised concerns that UK inflation will creep above the Bank’s two per cent target rate unless governor Mark Carney hikes Britain’s interest rates.
Read more: Three reasons the Bank of England will hold interest rates
Yesterday the consumer prices index (CPI) fell to two per cent for May, down from 2.1 per cent in April.
Morning Wire’s own Shadow Monetary Policy Committee yesterday predicted that the Bank will again hold rates at their current low level amid slowing job growth and poor economic data.