UK Firms Aim to Hike Pay with Inflation Amid Wage Slump
UK Firms Aim to Hike Pay with Inflation Amid Wage SlumpReuters

The Institute of Directors has revealed that around two thirds of UK companies are planning to raise wages to match inflation amid worsening pay levels across the country.

According to the group's latest survey, which polled 1,005 of its members between 12 June and 26 June, 36% pledged to bump up pay in-line with inflation while 29% said they intend to boost wages by a better rate.

"For many people, the recovery is something they hear a lot about but, as yet, have not really felt in their wallets," said James Sproule, chief economist at the IoD.

"For those employed in the private sector questioning when they will start to feel the benefits of growth, the answer is very soon."

Latest data from the Office for National Statistics showed in May that employment levels reached an all-time high but wage growth continued to weaken.

While the unemployment rate dropped to 6.5% in that month, from 6.9% in February, total pay growth, which includes bonuses, slowed to a record low of 0.3%.