CIPD/KPMG research: Pay increase expectations have fallen

Basic pay increase expectations by employers have fallen to 1.3% from 1.5% during the past three months, according to this quarter’s Labour Market Outlook from the†Chartered Institute of Personnel and Development (CIPD) and KPMG.

The survey, which polled 750 employers, also found that average pay settlements in the public sector are expected to fall to -0.33% which compares with 2.3% in the private sector.

Gerwyn Davies, public policy adviser at the CIPD, said: “The first quarter of 2011 was always going to be a quarter of reckoning for the jobs market, and it seems that last year’s modest recovery will be reversed by a modest relapse this year.”

Malcolm Edge, head of markets at KPMG, added: “These figures show that there continues to be a marked divide in the UK jobs market, with the public sector still fearing the worst while the private sector shows signs of better health.

“However, the private sector recovery is not yet fully established and therefore remains susceptible to shocks. However government stimulus with the banks to increase business could provide much needed finance for growth.Medium-sized enterprises are the life blood of the UK economy and this could be a very beneficial boost for them.”

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