According to recent research by XpertHR, British companies offered the lowest annual pay awards in over a year during the three months till January 2020, a factor that is likely to contribute to the slowdown in economic growth in the country. The median annual pay hike for employees in Britain declined to 2.1% in Q4 2019, the lowest levels seen since Q4 2018.
XpertHR also indicates that this could likely continue into this year, with employers turning more cautious about offering pay hikes to the workers in the wake of uncertain business conditions. A slowdown in wage growth has an overall impact on the country’s GDP which faces risks in the wake of weakening economic data overall as well as ongoing Brexit related uncertainties.
According to official government data, the pace of increase in average earnings slowed from 4.0% in Q2 2019 to 2.9% in Q4 2019. Although Britain enjoys record low unemployment levels, lower increases in wages is likely to weaken domestic consumption and add further pressure on its economy.