Increasing number of applicants keeps UK pay growth low

Basic pay in the UK is predicted to rise just 1% over the next 12 months, according to new research published on Monday.

Private-sector employees can expect to an average 2% increase to their salary but the median pay rise was pulled down by public-sector employers and charities, which plan to offer pay rises of just 1% and 1.4%.

The survey of more than 1,000 employers by the Chartered Institute of Personnel and Development and Adecco showed the low wage growth could be attributed to several factors, including the ongoing uncertainty surrounding Brexit, weak productivity and the recent rise in the National Living Wage.

It also found 50% of the average 24 job-seekers applying for low-skilled positions, 19 for medium-skilled jobs and eight for more high-skilled roles, were suitable.

Employee pay expectations were lower than 2016, suggesting that despite a lower rate of unemployment, employers have been under less pressure from staff to increase wages.

"Productivity levels are stagnant, public sector pay increases remain modest while wage costs and uncertainty over access to the EU market have increased for some employers," said Gerwyn Davies, author of the report and senior labour market analyst for the CIPD.