British workers may finally be getting a pay rise, according to a survey of businesses published alongside the Bank of England agents’ latest report on business conditions.
Private sector employers are expecting pay settlements to be around 3.1 per cent in 2018, compared to 2.6 per cent in 2017, the survey said. Overall, 386 businesses responded to the central bank’s survey employing a total of around 845,000 people.
Pay growth would be broad based, the agents wrote, with only construction companies expecting settlements not to accelerate. The biggest increase was expected in consumer services where a large number of companies employ people on the minimum wage.
The survey follows comments from Bank of England officials last week that indicated the central bank believes that interest rates will have to rise sooner and by more than previously expected to tame growing domestic inflationary pressures.
In their February inflation report, the monetary policy committee pointed to an acceleration in wage growth during the second half of 2017 and survey data which found new hires getting higher starting salaries.
The survey was published alongside the Bank of England’s 12 regional agents’ regular monthly report on the state of the economy.
Growth in activity “held steady at a modest pace”, the agents said. A rise in mergers and acquisitions, property sales and overseas demand for professional services, helped the UK’s crucial business services sector. Manufacturing exports were also helped by strong export demand.
The construction sector and consumer discretionary spending remained weak, the agents said.