UK wages soon to catch up with inflation, Bank of England survey finds
Stories like this – particularly against the background of lower wages and higher living costs in rural areas make me worry about imminent rises in interest rates.
British workers are set for the biggest annual pay rise in a decade, according to forecasts from the Bank of England’s agents, as the rising minimum wage and staff shortages finally begin to lift wages above inflation.
Companies expect to increase pay by 3.1% in 2018, compared with 2.6% last year, according to the latest survey of private-sector employers by the Bank’s network of agents across the country. A total of 368 businesses responded to the survey carried out between late November and mid-January, accounting for 845,000 UK employees.
The early indications for pay growth in the report, which is closely watched by rate-setters on the Bank’s monetary policy committee, suggest wages should begin to rise above the rate of inflation, which stood at 3% in January. The survey pointed to pay growth across the board, barring the construction sector, which is flirting with recession amid falling rates of work since the Brexit vote.