UK companies have lifted their expectations for pay rises, according to a Bank of England survey.
British employers’ expectations for pay growth in the coming 12 months increased to 5.1% from 4.8% in May.
The survey also found that recruitment difficulties are still widespread, with 88% of firms finding it harder to recruit new employees compared to normal.
Two-thirds reported that it was ‘much harder’, which was the highest since the question was first asked in October 2021.
Overall levels of business uncertainty edged up in June, with Brexit overtaking Covid as a leading worry for businesses.
The BoE says: “For the first time since the onset of the pandemic, Brexit was a larger source of uncertainty for panel members than Covid. 25% of respondents cited Brexit as a top-three source of uncertainty in June, up 5 percentage points on May.
Yesterday, BoE chief economist Huw Pill pledged the central bank would “deliver inflation back to its 2% target”.