LONDON (Reuters) – Hopes for higher wage growth across Britain are receding, apart from in a few sectors of the labour market that suffer from acute skill shortages, according to a report published on Monday by recruitment company Hays (HAYS.L).
Difficulties faced by most British employers in hiring the right workers decreased compared with last year, although still remained high, according to Hays’ annual Global Skills Index, compiled with consultancy Oxford Economics.
Earlier this month the Bank of England stuck to its view that pay growth will pick up over the next few years as it signalled that it was likely to raise interest rates in November for the first time more than 10 years.
But official data so far has shown annual wage growth stuck around 2.0 percent, despite Britain’s unemployment rate falling to its lowest level in more than four decades.
“Candidates in areas of skills shortages remain in high demand and can receive multiple job offers and counter offers. They are also commanding significant salary increases, but generally wage pressure is easing across the UK,” said Nigel Heap, managing director of Hays UK.
Engineering, IT and cyber security were the sectors suffering the most from a shortage of skilled workers, Heap said.
A weaker outlook for wage growth was common across European countries in the report, although Britain was among a handful on course to experience a decline in wages in inflation-adjusted terms over 2017 – along with Belgium, Italy and Spain, Hays said.
Its report was compiled using data from official sources and economic models from Oxford Economics, and covered the period to the second quarter of 2017.
Reporting by Andy Bruce; Editing by Keith Weir