The Bank of England (BoE) has indicated that a significant pay rise could soon be in store for UK workers.
Its agents’ 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%.
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, the BoE revealed.
The forecasted pay rise can be attributed to the upcoming increase in the National Minimum Wage (NMW), which is set to take effect from 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.
Commenting on the issue, Howard Archer, Chief Economic Adviser at EY Item Club, said: ‘Expectations that the BoE will raise interest rates in May will likely be fuelled by their regional agents reporting a pick-up in companies’ expected average pay settlements.’