Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Latest NewsLabour marketPay settlements

Pay growth at highest rate for almost 10 years

by Jo Faragher 16 Oct 2018
by Jo Faragher 16 Oct 2018

Wage growth in the UK is at its highest in almost 10 years, according to the Office for National Statistics.

Pay awards

Review of pay awards 2018: Private-sector pay 

Forecasts for pay awards in 2018

Pay excluding bonuses rose by 3.1% in the three months to August compared with the same period a year ago. This increase was just above inflation, which for this period was 2.5%.

David Freeman, ONS head of labour market, said: “People’s regular monthly wage packets grew at their strongest rate in almost a decade, but, allowing for inflation, the growth was much more subdued.

“The number of people in work remained at a near-record high, while the unemployment rate was at its lowest since the mid-1970s.”
Wages including bonuses rose at a pace of 2.7% in the three months to August.

The growth is in line with the Bank of England’s expectations: in August, it said that it expected total pay to be growing at a rate of 2.5% a year by the end of 2018, climbing to 3.5% by the end of 2020.

However, the strong increase in pay growth may be down in part to a 3% pay rise given to NHS workers in July, and the loosening of the public-sector pay cap, which held pay awards at 1% for several years.

The British Chambers of Commerce (BCC) pointed out that the pace of pay growth was unlikely to continue.

Suren Thiru, head of economics at the BCC, said: “While wage growth increased again, the pace at which pay growth is exceeding price growth remains well below the historic average, meaning the current squeeze on spending power is unlikely to ease.

“Achieving a meaningful improvement in wage growth will be an uphill struggle unless the underlying issues that continue to limit pay settlements are tackled – notably sluggish productivity, considerable underemployment and high upfront costs for businesses.”

Pay growth is also still under the 4% average recorded before the 2008 financial crisis.

The Resolution Foundation added that “real-terms pay still remains £12 below its pre-crisis peak. Earnings recovery has a long way to go”.

Gerwyn Davies, senior labour market analyst for the CIPD, said: “An increase in the number of people in full-time work, and a fall in the number of self-employed and part-time work, also suggests that employers are feeling more confident about hiring staff. This looks set to continue with the level of job vacancies reaching a new record level.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

“However, the shrinking number of candidates will feed into increasing recruitment and retention challenges for many employers, particularly for employers in sectors that have relied on non-UK labour to fill roles. This may partly explain why employment growth has slowed sharply in the last quarter.”

ONS data also showed unemployment fell by 47,000 to 1.36 million in the three months to August, while the number of people in work was down by 5,000, at 32.39 million.

Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. Jo is also the author of 'Good Work, Great Technology', published in 2022 by Clink Street Publishing, charting the relationship between effective workplace technology and productive and happy employees. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

previous post
One in four gender pay gap reports non-compliant
next post
Supporting veterinary graduates project wins prestigious Association for Business Psychology award

You may also like

Public sector workers gain pay rises of up...

22 May 2025

Pay awards in real terms could fall for...

21 May 2025

Ryanair demands flight attendants pay back salary increase

21 May 2025

NHS Scotland staff accept two-year 8.2% pay deal

16 May 2025

Nurses threaten strikes if pay demands not met

12 May 2025

Private sector median pay increases remain at 3.5%

6 May 2025

Public sector staff could be in line for...

28 Apr 2025

Confidence returning to jobs market, data shows

28 Apr 2025

What will reward look like in 2035?

28 Apr 2025

NI increase has not caused ‘knee-jerk reaction’ in...

23 Apr 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+