Total pay increases by 1.9%

Pay-Thinkstock-20141Total pay, including bonuses, for employees in Great Britain increased by 1.9% between October-December 2014 and October-December 2015, according to research by the Office for National Statistics (ONS).

Its Labour market statistics, February 2016 report also found that pay excluding bonuses increased by 2% between October-December 2014 and October-December 2015.

Average regular pay, excluding bonuses, was £465 a week before tax and other deductions in December 2015, compared to £456 a week in December 2014. Average total pay, including bonuses, was £496 a week before tax and other deductions, up from £489 a week a year earlier.

Between October-December 2014 and October-December 2015, regular pay in real terms (adjusted for consumer price inflation) increased by 1.9%, and total pay increased by 1.8%.

Gerwyn Davies, labour market adviser at the Chartered Institute of Personnel and Development (CIPD), said: “The statistics show that we’re still a long way off from the 3% pay increases that were expected. We know that a significant proportion of employers are reporting inflation and increases in employment costs as reasons why they are limiting pay rises.

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“With more people in work, the wage bill is being stretched; looking ahead, these costs will only increase so businesses need to look at ways to boost productivity and innovation in order to support the swelling workforce.”

Ben Brettell, senior economist at Hargreaves Lansdown, added: “The trend for decelerating wage growth continues; 1.9% is the slowest for a year, and emphasises that there is very little inflationary pressure coming from the labour market. Indeed, continued low price inflation could be depressing wage inflation as it leads workers to accept lower pay settlements, leading to a vicious cycle where both price and wage increases remain depressed.”