5% PAY RISE COULD BE THE NEW NORM, XPERTHR REVEALS

The latest data from XpertHR shows that pay awards are worth a median five percent in the three months to the end of December 2022. This is equal to the previous month’s figure and more than double that recorded in the same period in 2021 (2.3%). The gap between pay settlements and inflation remains substantial and will likely continue to be so over the coming 12 months.

The Consumer Prices Index rose by 10.7% in the 12 months to November 2022, slightly down from 11.1% in October, which marked a 41-year high. More than a quarter of all pay reviews take effect from January each year and whilst it is unlikely that pay will rise substantially in the coming months, the latest data shows that neither is there any sign of settlement levels dropping to where they were in the same period last year.

policy, but now that they’ve eased lockdown restrictions, there have been reports that hospitals in the country are under pressure due to Covid-related hospitalisations. According to UK-based research company Airfinity, its model estimates cases in China could reach more than three million a day in the first few months of 2023.

Dr Rana comments on the effects of this policy. She says: “Since China is the major producer and exporter of consumer goods in the world, the surge of Covid-19 infections the country is currently experiencing, due to recently lifting the strict restrictions the country had in place, will disrupt the Chinese manufacturing sector even further - at least in the short-term. This is likely to have a further impact on the global supply chain and, subsequently, on the global economy.”

Hodgson elaborates on this: “China is highly integrated into global supply chains. Shortages of even small components can cause bottlenecks and hold up production processes. This is, in turn, driving up inflation. For example, we’ve seen in the UK that a shortage of semiconductors for new cars has resulted in a spike in the price of second-hand cars. Global supply chain pressures have eased recently, although a combination of geopolitical and Covid-related risks mean they are likely to remain a background issue.”

Because of China’s importance to the global economy, their response to Covid in 2023, particularly over the winter months, could be an integral factor when it comes to improving economic outlooks around the world. However, the UK has its own problems to contend with in 2023, and although the incoming recession does not appear to be one of the worst on record, the UK needs to do more if it wants to avoid falling further behind the other major economies in the years ahead. 