LONDON (Reuters) – Major British employers gave staff an average 2 percent annual pay rise in the three months to the end of August, a sub-inflation rate that has been unchanged since the end of last year, pay analysts XpertHR said on Thursday.
A pick-up in wage growth is unlikely soon as employers remain cautious in the face of political uncertainty following the Brexit vote, XpertHR said.
“Overall restraint remains across the economy and workers face a continued period of below-inflation pay increases,” XpertHR analyst Sheila Atwood said.
By contrast, the Bank of England expects wage growth to rise, prompting most of its policymakers to say that they are likely to vote “in the coming months” to raise interest rates for the first time in over a decade.
Weak productivity and a rise in low-paid jobs have weighed on wage growth in Britain since the 2008 financial crisis while higher inflation, caused largely by last year’s Brexit vote, has put further pressure on households.
Wage growth was particularly low in the public sector, where the government continued to impose a 1 percent pay cap on most workers although the government said this month it would relax the cap for police and prison workers.
Reporting by Polina Ivanova; Editing by William Schomberg