Wage rises in UK to lag behind Europe next year

Despite George Osborne’s sanguine Autumn Statement in which he announced that the UK economy was racing ahead of those of our European neighbours, the UK is lagging terribly when it comes to keeping up with pay increases across the world.

In 2014, British employees can expect pay rises of just 2.5%, down from 3% last year, seeing the UK lingering at the bottom of the table along with Japan, France, Spain and Ireland.

It is feared that as companies keep pay levels low, the economic recovery will falter as wages fail to keep pace with RPI (retail price index) inflation. Current growth remains largely based on consumer spending and the rising property market. 

The survey, by global management consultant Hay Group quizzed more than 22,000 companies around the world and found that across Europe, pay will rise by an average of 3.1%.

Hay consultant David Smith said: “It’s pleasing to see the recent economic growth figures but it’s clear that businesses are remaining cautious when it comes to setting pay.”

China topped the pay rise forecasts with predicted rises for workers of 8.6%, followed by Ukraine at 7.9% and Brazil at 6.1%.

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