UK wages to grow more slowly than expected in 2016, CIPD says

The government got its forecasts for wage growth in Britain in 2015 very wrong, according to an industry body.

Salaries will continue to grow at a 2% pace next year, because employers were worried about myriad other personnel costs which were set to rise, the Chartered Institute of Personnel Development (CIPD) said.

That was far below the 3.5% clip which the Office for Budget Responsibility and the Bank of England had pencilled in.

Employers were fretting about the cost of the increased minimum wage, greater pension costs for smaller companies and a looming charge on large companies to take apprentices on, the CIPD said.

With inflation close to zero, some employers would try to manage these costs by restricting pay rises for their better-paid employees," CIPD chief economist, Mark Beatson, said, Reuters reported.

Beatson said that record levels of net migration into Britain were expected to help keep a lid on salary costs, allowing firms to more easily meet their staffing needs and eliminating the risk of any ‘skills crunch’ happening soon.