Salary growth for UK workers will remain behind most of Europe, says research

In 2018, the average worker in the UK will get a monthly salary increase of £4.41 before tax (£53 pa).

That’s according to the latest Salary Trends report, by ECA International. It says that this means that the UK is near the bottom of the salary increase table in Europe. Salaries in our private sector are expected to rise by just 0.2 per cent next year – that’s up to fifteen times less than our European peers.

So next year, the UK will rank 23rd out of 26 countries surveyed in the region, says the research. It points out that only employees in Hungary, Poland and Ukraine are anticipated to have lower real salary increases than those in the UK.

It has made the calculation based on the difference between the forecast nominal salary increase (2.8 percent in the UK) and inflation (2.6 percent). The latest survey also reveals that employees in the UK received a 0.1 percent real salary increase this year, lower than forecast in 2016 (0.3 percent), which the report says is due to a jump in inflation caused by sterling’s fall in value.

Why are increases so low?

“Productivity growth in the UK has remained low in recent years so employers have not been able to offer the level of salary increases that they have been able to in the past,” says Steven Kilfedder, Production Manager at ECA International. “This, combined with higher inflation, which is expected to be 2.6 percent next year, has caused something of a pay crunch for UK workers.”

Rest of Europe

According to the report, wage growth in Germany and France is expected to be less than half the rate of 2015 at 1.2 percent and 0.9 percent respectively. However, as its economy stabilises and inflation falls, employees in Russia are set to receive a 3.1 percent real salary increase next year, taking it to the top of the European rankings in 2018. The average rise across the continent is expected to be one percent, and for the first time in five years no European nation is expected to experience a salary decrease.

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