Following insights from a survey by the Confederation of British Industry (CBI) that suggested businesses were aiming to raise pay for their employees in line with or above inflation this year, the Bank of England (BoE) has also indicated that a significant pay rise could soon be in store for UK workers.
The BoE survey, which polled 368 UK businesses, suggested that real wages are on course to begin to rise above inflation, and grow by 3.1% during 2018 – a significant rise when compared to 2017’s figure of 2.6%.
The forecasted pay rise can be attributed to the upcoming increase in the National Minimum Wage (NMW), which took effect on 1 April. At this time, the NMW for those aged between 21 and 24 will rise to £7.38 an hour, whilst the National Living Wage (NLW) for workers aged 25 and over will increase to £7.83 per hour.
Despite the optimism of businesses increasing wages, the CBI survey results showed that 55% of their respondents stated that they have felt the effects of the NLW on their business, which is a slight rise when compared to last year’s figure of 50%.
In regards to sector, the BoE revealed that most industries in the UK are set to benefit from the wage rise: however, individuals working in the construction sector are not in line for the pay rise.
It’s important that businesses regularly reforecast the impact of such changes on their cashflow position, to identify any periods of financial difficulty.
If you have concerns that increased wage bills or other operating costs are going to impact your business and you want to understand more about your options, talk to HJS Recovery in confidence today. The sooner you address any issues, the more options could be available to restructure your position and get back to a more positive financial position. Call us on 0808 1644 222.