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Public Sector to See Strong Pay Growth in Line with Private Sector, Says Survey

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Strong Pay Growth Expected in Private and Public Sectors in the UK

A recent survey conducted by the Chartered Institute of Personnel and Development (CIPD) suggests that strong pay growth in the private sector will be mirrored in the public sector in the coming year. This indicates that there is no sign of easing inflationary pressure in the job market.

According to the survey, both private and public sector employers are planning 5% pay rises for their workers. If these plans materialize, public sector workers will see their biggest pay rise since the CIPD began conducting surveys in 2012.

The survey, which took place from September 18 to October 8 and involved 2,000 employers, was conducted after Prime Minister Rishi Sunak announced a pay rise of over 6% for teachers, doctors, and other public sector workers in July.

The Bank of England also anticipates wage growth of 4.25% next year. This expectation played a significant role in the bank’s decision to maintain interest rates at a 15-year high of 5.25%, despite a decrease in headline inflation and signs of economic stagnation.

The CIPD survey revealed that 51% of public sector employers and 38% of private sector employers reported difficulties in filling vacancies. This indicates a high demand for workers, particularly in the public sector.

Jon Boys, a senior labor market economist at the CIPD, commented on the findings, stating, “The post-pandemic economy has been characterized by high vacancies and dwindling candidate supply, and this dynamic continues. There remains strong demand for people, particularly in the public sector. It’s no surprise, therefore, that employers are expecting pay increases to match those in the private sector to remain competitive.”

Furthermore, the survey indicated that a quarter of organizations with hard-to-fill vacancies are planning to introduce or increase automation, which is almost twice the level reported in mid-2022.

Economists surveyed by Reuters predict that official data due to be released on Tuesday will highlight the Bank of England’s dilemma. While employment numbers are expected to decrease, wage growth is still projected to be close to record highs.

This survey provides valuable insights into the current state of the UK job market and the expectations for pay growth in both the private and public sectors. As the economy continues to recover from the impact of the pandemic, it is crucial for businesses and organizations to attract and retain talented workers. The anticipated pay rises and the utilization of automation in some sectors reflect the ongoing challenges employers face in meeting their workforce needs.

More detail via Investing.com UK here… ( Image via Investing.com UK )

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