Oil Prices Slip as U.S.–Iran Talks Ease Supply Disruption Fears 
Gold and Silver Prices Slide as Dollar Strength and Easing Tensions Weigh on Metals 
Vietnam’s Trade Surplus With US Jumps as Exports Surge and China Imports Hit Record 
Gold Prices Slide Below $5,000 as Strong Dollar and Central Bank Outlook Weigh on Metals 
Trump Signs Executive Order Threatening 25% Tariffs on Countries Trading With Iran 
Australia’s December Trade Surplus Expands but Falls Short of Expectations 
Dollar Near Two-Week High as Stock Rout, AI Concerns and Global Events Drive Market Volatility 
China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices 
Dollar Steadies Ahead of ECB and BoE Decisions as Markets Turn Risk-Off 
South Korea’s Weak Won Struggles as Retail Investors Pour Money Into U.S. Stocks 
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
Asian Markets Slip as AI Spending Fears Shake Tech, Wall Street Futures Rebound 
U.S.-India Trade Framework Signals Major Shift in Tariffs, Energy, and Supply Chains 
Dow Hits 50,000 as U.S. Stocks Stage Strong Rebound Amid AI Volatility 
Thailand Inflation Remains Negative for 10th Straight Month in January 
Asian Stocks Slip as Tech Rout Deepens, Japan Steadies Ahead of Election 
Trump Endorses Japan’s Sanae Takaichi Ahead of Crucial Election Amid Market and China Tensions 
Public-Sector Pay Rises Outpace Private Sector
In a shift from previous trends, British public-sector employers are now planning to increase pay faster than private-sector employers. According to the Chartered Institute of Personnel and Development (CIPD), a survey of 2,000 employers between September 18 and October 9 revealed that median expected public-sector pay rises for the next year had jumped to 4%, up from 2.5% in the previous quarter. This outpaces the private sector, where expected pay rises remain at 3%.
Factors Driving the Pay Increase
The rise in public-sector pay expectations follows the approval of substantial pay raises by the newly elected Labour government, partially funded by higher employer taxes. Finance Minister Rachel Reeves announced pay increases ranging from 4.75% to 6% for millions of public-sector workers shortly after taking office. Public-sector pay had lagged behind both private-sector increases and inflation during the pandemic, making the recent boost especially significant.
Additionally, increased government spending and public-sector wage increases announced in the budget have provided a boost for both employers and workers.
Private-Sector Challenges
Private-sector employers, meanwhile, face rising costs, including a 25 billion-pound increase in social security contributions, which may limit their ability to offer competitive pay raises. These increased costs could also reduce hiring and investment in worker training, according to James Cockett, CIPD’s senior labor market economist.
Impact on the Economy
Despite these challenges, the Bank of England is closely monitoring wage growth to gauge inflation pressures. It recently reduced the benchmark Bank Rate to 4.75%, with gradual further cuts expected.
For further reading, you can check out the following sources:
- UK Public-Sector Pay Set to Rise Faster Than Private Sector for First Time Since 2020
- Public Sector Pay Boost Following Labour's Election Victory
- Economic Impact of Rising Business Costs on UK Employers
