UK employers expect to offer smaller pay rises in 2017

UK employers expect to offer smaller pay rises in 2017

British employers expect to offer less generous pay deals this year compared with 2016 despite rising inflation, probably putting pressure on consumer spending as the year goes on, a Bank of England survey showed on Wednesday.

The BoE said firms expected the average pay deal would offer staff a 2.2% rise, down from 2.7% in 2016, reflecting difficulties passing on rising costs after last year's Brexit vote and a slowdown in the rate of increase in Britain's minimum wage.

"Consumer spending growth had remained resilient, but was expected to ease during the year as prices rose," the BoE said in a regular report based on meetings between its regional agents and around 700 businesses across the United Kingdom.

The central bank last week said wage growth would be a key factor in determining if it needs to lift interest rates from their current record low 0.25%.

Source: www.businessworld.ie