Rate of pay rises expected to slow over coming year as inflation eases
![](https://www.cityam.com/wp-content/uploads/2021/09/morepaybankers-57ed7e2900068-57ed7e290e486.jpg?w=742)
The rate of pay rises is expected to slow over the coming year as easing inflation means employees face less pressure to secure higher pay packages.
According to new biannual forecasts from XpertHR, which took expectations from over 200 organisations, average pay bumps over the coming year will stand at five per cent. This compares to an average of six per cent in the year to September.
Just 4.5 per cent of organisations forecast that wages would remain flat while around 35 per cent anticipated giving a five per cent pay increase.
Figures from the previous three months showed that average pay awards stood at 5.4 per cent. Although this was slightly higher than the five per cent recorded in the previous rolling quarter, the level of pay increases stands below the six per cent seen over the majority of this year.
In the year to September, public sector pay awards stood at 6.1 per cent – the highest level since 1992. Private sector pay increases meanwhile stood at six per cent over the past year.
Sheila Attwood, senior content manager, data and HR insights at XpertHR, said: “After a year of strong pay growth driven by a tight labour market, signs of a cooling market are beginning to emerge, influenced by a sustained period of higher interest rates reducing both confidence in the economy and wage settlement demands.
“With inflation now on a downward trend, we are already seeing lower pay rises than in the first half of the year,” Attwood added.
XpertHR’s figures come just a day after new figures showed a slight easing in wage growth. Including bonuses, annual wage growth dropped to 8.1 per cent. This was down from 8.5 per cent last month and lower than the 8.3 per cent expected by economists.
Policymakers at the Bank of England have highlighted developments in wage growth as a crucial indicator for the persistence of inflation. With unemployment starting to rise and inflation easing, the rate of wage growth is easing.