UK Cost of Living: Real Wages Not Expected to Rise Next Year

The cost of living for UK workers will continue to be an issue throughout 2015 as real wages are not expected to grow, according to XpertHR.

The survey revealed that private sector pay packets will hold steady at 2% next year, matching The Office for Budget Responsibility's forecast of Consumer Price Index (CPI) inflation of 2% for 2015.

In contrast, XpertHR said pay settlements were in the region of 2.5% to 3.5% between 1993 and 2008.

"This looks like pay misery without end. Britain needs, but is not getting, a pay rise," said Frances O'Grady, the general secretary of the Trades Union Congress.

"But without more spending power in people's pockets it will be hard to sustain the recovery.

"Already the deficit is much greater than expected because the tax take is down. The economy is looking more fragile than even a few months ago."

The research also revealed that industrial sector employers predicted pay settlement hikes of 2.5%.

"It won't always be possible for employers to target the pinch points in the labour market through the annual pay review so many will be making one-off changes to address particular issues such as the retention and recruitment of particular workers," said Sheila Attwood, pay and benefits editor at XpertHR.

The figures come after the Office for National Statistics said that average weekly earnings grew by 0.9% in the year to August 2014.

The figures mean that average total pay (including bonuses) for employees in UK was £479 ($762, €601) per week before tax and other deductions from pay.