Total pay, including bonuses, increased by 0.7% in real terms in Great Britain between November 2015-January 2016 and November 2016-January 2017, according to the Office for National Statistics (ONS).
Its UK labour market: March 2017 report also found that regular pay, excluding bonuses, increased by 0.8% in real terms between the three months to January 2016 and the three months to January 2017. This is the lowest growth rate since the three months to November 2014, which was recorded at 0.7%.
In nominal terms, which have not been adjusted for price inflation, total pay increased by 2.2% between the three months to January 2016 and the three months to January 2017, and regular pay increased by 2.3%. In comparison, both total and regular pay increased by 2.6% between October-December 2015 and October-December 2016.
In nominal terms, average regular pay, excluding bonuses, was £477 a week before tax and other deductions from pay in January 2017, compared to £468 a week in January 2016.
Average total pay, including bonuses, for employees in Great Britain was £507 a week in January 2017 before tax and other deductions from pay, compared to £499 a week in January 2016.
Since January 2000, average pay in nominal terms has increased by 62.9% from £312 a week in January 2000 to £507 a week in January 2017. Over the same time period, the Consumer Price Index has increased by 41%.
Mariano Mamertino, Europe, Middle East and Africa (EMEA) economist at Indeed, said: “Employers are feeling the strain in a labour market that is now tighter than it has been in decades. Finding the right staff is getting harder by the day as recruiters battle it out for a shrinking pool of available talent.
“While many employers are being forced to offer better pay packages to woo recruits, for existing staff pay rises remain modest. Though the 2.3% average annual rise still outstrips inflation, the prospect of real wages falling later this year looms ever larger.”
Ian Brinkley, acting chief economist at the Chartered Institute for Personnel and Development (CIPD), added: “Average earnings growth on regular pay has slowed, suggesting that real wages are falling as inflation increases. This could be a sign that some employers are seeking to offset the impact of the introduction of the apprenticeship levy and increases to the national living wage next month through lower basic pay awards.
“With less chance of a pay rise and money not going as far when paying for the weekly shop and bills, UK [employees] will need to watch their spending carefully.”