Newspaper article The Journal (Newcastle, England)

'Pay Is Recovering - but It's Unlikely to Rise Fast'

Newspaper article The Journal (Newcastle, England)

'Pay Is Recovering - but It's Unlikely to Rise Fast'

Article excerpt

Byline: JONATHON MANNING Reporter jonathon.manning@reachplc.com @JONNYAMANNING

WORKERS' pay is set to rise after years of low growth but not at any great rate, according to a leading figure at the Bank of England.

Gertjan Vlieghe, a member of the Monetary Policy Committee at the Bank of England, told an event in Newcastle said that worker wage growth is starting to improve after being stuck at low levels for a number of years.

But he prefaced his comments with a warning to workers that their pay would not soar overnight and that the increase was happening slowly.

Employees have faced an uphill battle with businesses to increase their pay in recent years, despite the UK boasting record levels of unemployment, which usually goes hand in hand with wage growth.

Earlier this month a report by the respected Institute for Fiscal Studies found that the financial crisis has had a lasting impact on people's incomes, with average wages still PS760 lower than they were a decade ago. Those in their 20s and 30s have taken the largest hit. Speaking to The Journal after an event at Newcastle University Business School, Dr Vlieghe said: "The general idea is an old one that is still valued. At some point the unemployment rate is low enough that it gets increasingly difficult for employers to find workers or keep the ones they have. We are seeing that in a number of indicators. "The unemployment rate is at a 43-year low. We are also seeing reports of skills shortages at cyclical highs. We are also seeing that job turnover is back at a cyclical high, showing people have the confidence to leave their jobs and look for another one.

"That creates pay pressures as their companies try to attract employees and stop their own from leaving.

"I think it is fair to say that this has happened later in the process and we have been expecting those signs. …

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