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Britons set for 4% pay deal

Britons could enjoy a wage boost of four per cent this year, according to the latest forecasts.

Incomes Data Services predicts that annual wage inflation will rise to four per cent this year, placing it at the top-end of the usual three to four per cent range.

With two-thirds of salary rises awarded in the first four months of the year, employees could soon know whether they will be among the beneficiaries.

The forecast comes as data confirm that the number of people in permanent jobs is growing at its fastest rate for nearly three years.

Figures from KPMG show that recruitment agencies are placing staff at the fastest rate for 33 months.

While good news for employees, there are, however, concerns that generous wage deals could encourage the Bank of England to increase interest rates.

Wage inflation is one of the largest pressures on inflation, with the bank mandated to respond to rising inflation with an interest rate hike.

The bank will next meet to discuss interest rates this Thursday although is unlikely to move them from the present five per cent rate for the time being.

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09/01/2007 10:00:48

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