UK Economy

Bank of England sees modest pick-up in pay settlements

FILE PHOTO: Workers emerge from Bank underground station with the Bank of England (L) and Royal Exchange building (R) seen in the City of London financial district, London, Britain, January 25, 2018. REUTERS/Toby Melville/File Photo

LONDON (Reuters) - A Bank of England survey of companies published on Wednesday showed employers increased slightly the pace of pay increases for staff in early 2018 and their hiring plans pointed to modest growth in headcount.

“Growth in total labour costs remained modest, though average pay settlements this year were a little higher than in 2017 for many contacts, at between 2.5 percent and 3.5 percent,” the BoE said.

The survey was considered by policymakers at their March meeting when they kept interest rates unchanged at 0.50 percent.

The BoE has said it expects pay growth to pick up speed this year, one of the main reasons it raised interest rates in November and has signalled further increases ahead.

Writing by William Schomberg; editing by Kate Holton