UK Pay Expectations
Weak pay growth expectations among broader workforce despite rising salaries for new hires
A survey of just under 1,000 (973) employees in March showed an ongoing lack of pay pressures in the economy at the end of the first quarter. The representative panel of British households, polled by IPSOS Mori on behalf of Markit, found that, while 58 percent of employees expect a pay rise in 2015, only one-in-five anticipate an increase of 2 percent or more. Just 8 percent anticipate a pay rise in excess of 3 percent.
Only 10 percent of public sector employees expect their pay to rise by more than 2 percent compared to 27 percent in the private sector. Meanwhile, just over one-in-three employees (35 percent) expect to see their pay frozen compared with 2014, while a further 7 percent expect their pay to be cut.
Taken in conjunction with survey evidence from the Report on Jobs, the findings suggest a divergence of pay pressures between those changing jobs and those staying in their current roles. The former group are frequently seeing higher salary offers, linked to skill shortages (see sections 5 and 6). However, people not changing jobs, constituting the majority of the workforce, are clearly struggling to negotiate higher pay, partly reflecting record low inflation.