Wages Still Stagnant

Pressure on incomes looks set to continue, with pay rises forecast at 1% over the next year, a survey predicts, says the Chartered Institute of Personnel and Development (CIPD).

Despite falling unemployment, wage growth is weak because the supply of labour has also gone up, says the Chartered Institute of Personnel and Development (CIPD).

The CIPD said for every low-skilled job, there were 24 applicants. There were also 19 candidates for every medium-skilled job and eight for every high-skilled vacancy. The workforce had been boosted by more workers from other EU countries, as well as by older workers and former welfare claimants.

Gerwyn Davies, who is senior labour market adviser at the CIPD, said, "The facts remain that productivity levels are stagnant [and] public sector pay increases remain modest, while wage costs and uncertainty over access to the EU market have increased for some employers."

Not all recent surveys back up the CIPD's view. Last week, a survey of employment agencies found that the UK labour market was tightening, with employers finding it harder to recruit staff.

That survey said that pay rates for both permanent and temporary staff were rising quickly because of a continuing fall in the number of job applicants.