# UK employers see slight fall in pay awards over 2023 – XpertHR
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-03-22
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: British Employers Forecast 5% Average Pay Settlements for
Meta Description: Industry data shows pay awards may have peaked, putting downward pressure on pay growth amid concerns over inflation, labour shortages, and competitiveness.
URL: https://financedigest.com/uk-employers-see-slight-fall-in-pay-awards-over-2023-xperthrhtml

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By Suban Abdulla

LONDON (Reuters) – British employers expect pay settlements over 2023 as a whole to average 5%, down slightly from the 32-year high of 6% recorded during the three months to the end of February, new industry data showed on Wednesday.

“Our forecast indicates that pay awards may have reached their peak and will settle throughout the course of the year,” said Sheila Attwood, senior content manager at XpertHR.

The [forecast is based on a survey](https://www.financedigest.com/elevator-components-market-surveys-opportunity-growth-and-forecast-by-end-use-industry-2021-2031.html "Elevator Components Market Surveys, Opportunity, Growth and Forecast by End-use Industry 2021-2031") of 266 organisations which employ a total of more than 300,000 staff.

If pay growth has peaked, this will be welcome news for the [Bank of England](https://www.financedigest.com/bank-of-england-fines-former-tsb-executive-over-2018-it-failure.html "Bank of England fines former TSB executive over 2018 IT failure"), which is concerned that double-digit inflation will be harder to tame if pay awards keep growing.

However, nearly all employers noted pressure to increase pay deals, with the majority citing inflation, labour shortages and the need to [offer competitive pay](https://www.financedigest.com/spain-offers-to-pay-companies-testing-a-4-day-work-week.html "Spain offers to pay companies testing a 4-day work week").

[Pay awards in the three months to the end of February averaged 6%, unchanged from the three months to the end of January and the joint highest since September 1991, according to XpertHR’s analysis of 198 pay awards covering 450,000 staff](https://www.financedigest.com/uk-firms-plan-biggest-pay-rises-since-2012-to-fill-staff-gaps.html "UK firms plan biggest pay rises since 2012 to fill staff gaps").

XpertHR said the rising [national living](https://www.financedigest.com/still-living-at-home-a-third-of-the-nation-cant-afford-to-rent.html "Still living at home? A third of the nation can’t afford to rent") wage, which will increase by 9.7% next month for people aged 23 and over, was also putting upward pressure on pay deals.

[Pay awards remain well below the rate](https://www.financedigest.com/beat-the-exchange-rate-and-buy-that-dream-holiday-home-by-paying-in-pounds.html "Beat the exchange rate and buy that dream holiday home – by paying in pounds! ") of inflation. [Consumer price inflation has fallen slightly since it hit](https://www.financedigest.com/uk-consumer-mood-hits-one-year-high-but-financial-gloom-persists.html "UK consumer mood hits one-year high, but financial gloom persists") a 42-year of 11.1% in October last year, and was 10.1% in January.

The country’s budget forecaster, the Office for Budget Responsibility (OBR), last week forecast [inflation would fall](https://www.financedigest.com/boes-mann-falling-headline-inflation-high-core-make-policy-difficult.html "BoE’s Mann: Falling headline inflation, high core, make policy difficult") to 2.9% by the end of 2023, but added Britain remained on track for a record fall in living standards over the two years to March 2024.

February inflation [data is due at 0700 GMT on Wednesday and is forecast to show a fall](https://www.financedigest.com/stocks-yields-fall-data-suggests-u-s-economy-cooling.html "Stocks, yields fall; data suggests U.S. economy cooling") to 9.9%. A narrow majority of economists polled by Reuters expect the [BoE to raise its main interest rate](https://www.financedigest.com/uk-economys-unexpected-bounce-spurs-more-boe-rate-hike-talk.html "UK economy’s unexpected bounce spurs more BoE rate hike talk") on Thursday to 4.25% from 4%.

(Reporting by Suban Abdulla; editing by David Milliken)


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