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--UK 2018 Pay Deals Seen Rising To 2.5% To 3.5% Rise
By David Robinson
LONDON (MNI) - Bank of England business agents reported that recruitment
difficulties for firms across the UK had intensified and pay deals were expected
to nudge higher in 2018.
The BOE Agents Report found firms' expectations for pay settlements in 2018
were clustered in a 2.5% to 3.5% range rather than the 2% to 3% seen in 2017.
Reports of skill shortages in all sectors have been widespread and the agents
said that recruitment difficulties were above normal in a range of areas.
When BOE Governor Mark Carney was asked at the November Inflation Report
press conference why he believed earnings growth would rise, he trailed this
Carney said that back in November 2016 the agents survey had predicted wage
growth would not pick up in 2017 "and they were right ... (their) new survey is
that wage growth will pick up in 2018."
The MPC has split over the likelihood of pay growth rising, with the two
dissenters who backed no change at the November, deputy governors Jon Cunliffe
and David Ramsden, doubtful that pay growth would accelerate.
The BOE agents report also found investment intentions pointed to modest
growth, similar to that seen in the past 12 months, and activity growth was
--MNI London Bureau; tel: +44 203-586-2223; email: firstname.lastname@example.org