LONDON (Reuters) - British employers have remained cautious as they set pay offers going into 2016, according to a survey on Thursday that underscores why the Bank of England is in no hurry to raise interest rates.
XpertHR, an online human resources firm, said the median pay deal offered by employers for 2016 so far represented an increase of 2 percent, the same as in 2015, and companies predicted it remain at that level throughout this year.
“Employers are not showing any signs of wanting or needing to award higher pay rises in 2016,” Sheila Attwood, XpertHR’s pay and benefits editor, said.
BoE Governor Mark Carney said on Tuesday he wanted to see stronger wage growth as well as a pickup the overall economy and other inflation pressures before he would think about raising interest rates.
On Wednesday, data showed that growth in the earnings of workers in Britain in the three months to November was its slowest since February, despite another fall in unemployment which hit its lowest level since 2006.
Attwood said many employers were making plans to meet the impact of a new, higher minimum wage which is due to be introduced in April.
Just under half of British employers will be affected by the so-called National Living Wage with a median of 11 percent of their workforce entitled to a pay rise, XpertHR said.
Writing by William Schomberg, editing by Andy Bruce