Being a headhunter at Ellwood Atfield, I am uniquely placed to hear from candidates from a myriad of sectors, across all levels within corporate affairs. A perennial issue for the last two years, and frequent talking point with our candidates, has been the impact of inflation and living standards.
Candidates have been more conscious of securing better paid jobs, seeking higher wages because they have seen their real income eroded by fast-rising prices. Is this about to change?
In a significant economic development, the UK has witnessed a noteworthy milestone as average pay growth has surged above the rate of inflation for the first time in almost two years.
The UK has grappled with the effects of inflation outpacing average pay growth, placing financial strain on households and dampening consumer purchasing power, causing concern among policymakers, economists, and ordinary people.
Against the strong economic headwinds’ inflation, driven by various factors such as supply chain disruptions, rising commodity prices, the economic legacy of the pandemic and other global economic trends, has been steadily rising.
Average pay growth struggled to keep pace, resulting in a real wage decline, impacting household budgets, saving rates, and overall economic stability. This has been a significant concern particularly for Ellwood Atfield’s junior candidates, and meant candidates were more driven by salary offerings at prospective employers.
Reprieve may be on the horizon. Recent data indicates a significant shift in the downward pattern. Average pay growth has finally surged ahead of the inflation rate. Official figures have shown that wages rose by 7.8 percent between June and August, higher than average inflation over the same three months, for the first time since October 2021.
Does this development hold the promise of improved financial circumstances and potential stability in living standards? Not in the immediate term. Workers should not anticipate a sudden improvement in their real income. But this data is a positive indicator for the UK’s economic recovery and growth prospects which, if sustained, will see a rise in real income, which in turn can bolster consumer confidence and spending and contribute to a wider economic recovery.