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11/10/2016
Wage growth will remain at around 2% for most or all of 2016, significantly below the forecasts from the Bank of England and Office for Budget Responsibility for average earnings growth of around 3.5%, according to Mark Beatson, chief economist at the CIPD. However, low inflation will mean most workers will still feel better off, Beatson adds in his annual analysis of the UK labour market.
Commenting on his pay predictions, he says:
‘There are several reasons why employers might be nervous heading into 2016. Some are worried how they will pay for the National Living Wage, especially those in retail, hospitality and social care. Larger businesses will also have to pay the Apprenticeship Levy from April 2017, while many businesses with fewer than 30 employees will have to pay additional pension costs during 2016 as auto-enrolment is rolled out further. With inflation close to zero, some employers will try to manage these costs by restricting pay rises for their better-paid employees.’