In the period spanning three months until April, British employers reached agreements on average pay increases of 5.6 per cent. This rise, influenced by elevated consumer price inflation and a significant hike in the minimum wage, adds additional pressure on the Bank of England to continue raising interest rates.
According to Incomes Data Research (IDR), the median pay settlement granted by prominent British employers surged to 5.6 per cent in the three-month period ending in April. This figure represents the highest recorded level since 2005, surpassing the 5.0 per cent reported in the previous three-month period ending in March.
During the same period, median pay awards for private-sector employees experienced a rise to 5.8 per cent. In contrast, pay awards for public-sector workers averaged at 5.0 per cent.
Despite consumer price inflation easing to 8.7 per cent in April, Zoe Woolacott, a senior researcher at IDR, stated that the labour market in Britain continued to be tight.
According to Woolacott, the IDR's measure of median pay increases in both the private and public sectors has been consistently rising. Starting from an already above-average 4.0 percent in April of the previous year, this upward trend is attributed to the escalating cost of living and inflation.
April is a significant month for negotiations between employers and employees regarding pay agreements. It coincides with a period when many public-sector workers engage in industrial action.