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UK workers face renewed hit to spending power in 2018: Korn Ferry
[LONDON] Workers in Britain look set to suffer another hit to their spending power in 2018 while most of their peers in the world's other big rich economies will have small gains, human resources firm Korn Ferry said on Tuesday.
A combination of high inflation, caused in large part by the 2016 Brexit vote, and weak wage growth means British workers are expected to see their salaries fall in real terms by 0.5 per cent next year, according to a survey published by the firm.
The most recent official data has shown British average weekly earnings fell by an annual 0.4 per cent in the three months to September when adjusted for inflation.
Globally, inflation-adjusted wages are expected to rise by 1.5 per cent next year, Korn Ferry said, the weakest predicted increase in five years, underscoring the challenge for policymakers in many countries where unemployment is low but wage growth is weak.
Benjamin Frost, Korn Ferry's global general manager, said the situation in Britain was aggravated by the jump in inflation which hit three per cent in October and is expected to stay at that level when data for November is released on Tuesday.
"What stands out is that employers are not increasing their pay rises to account for that," he said. "They have limited ability to charge their customers more and improvements in productivity are easier said than done in the short term."
In the United States, workers were expected to see a real-terms salary increase of one per cent in 2018, based on forecasts of wage increases of three per cent and inflation of two per cent.
Korn Ferry said the predicted salary increases were based on its database which contains information from 25,000 organisations across more than 110 countries. In Britain, 770 firms took part.