UK firms plan to raise pay by 3.1 percent in 2018: BoE survey

European Stock Markets

British businesses plan to offer staff bigger pay rises this year due to a higher minimum wage and staff shortages, according to a Bank of England survey which is likely to feed the central bank’s concern about growing domestic inflation pressures.

Firms plan to offer average pay settlements of 3.1 percent compared with 2.6 percent last year, the BoE said on Wednesday, with the biggest increases in consumer services businesses with a high number of staff paid close to the minimum wage.

“Companies also reported an increased tendency to pay above the National Living Wage, due to competitive pressures. 

However, many firms were planning to limit management pay increases to 1-2 percent in order to hold down their overall pay settlement,” the BoE said.

The BoE survey was based on replies from 368 businesses employing 845,000 staff in Britain.