UK’s Workforce to See Sharpest Pay Rises Since Global Financial Crisis
Aiswarya Gopan • 1 min read
A recent report from the Confederation of British Industry (CBI) paints an interestingly optimistic picture as far as pay rises go across Britain. As economic recovery picks up place, British businesses are struggling to find talent to recruit amid the rebound and are all set to offer the most widespread pay hikes seen since the global financial crisis back in 2008-09.
According to the CBI, 44% of businesses are planning pay hikes in line with the rise in inflation while 24% of firms surveyed plan to offer pay rises beyond current inflation levels. Combined, this accounts for the highest percentage of businesses looking to increase pays substantially in more than 11 years.
Over 75% of businesses surveyed by the CBI highlighted labor shortage as a key issue weighing on their competitiveness – the highest levels seen in five years. Against the backdrop of this data, the group has called for the government to reduce Visa restrictions which could make it easier to hire skilled talent from the EU region.
Director of skills and inclusion at CBI, Matthew Percival, notes, “Pay intentions are rising across the board as firms reopen and the economy recovers.” While this may sound positive, he also cautions that in case productivity levels do not see a corresponding rise, businesses may force the increased costs they incur from the pay rises onto customers, which could lead to price rise.
Inflation is fast becoming one of the biggest concerns plaguing economies around the world as they emerge front the coronavirus crisis. Later this week, the BOE is all set to meet for its monetary policy review and officials are likely to consider the effects of inflation, especially on account of the global supply chain disruptions and rising commodity prices.