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UK wages to see biggest increase since 2008

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UK workers will see a real wage increase of 2.3% in 2016, the largest increase since 2008

This is according to a forecast by Korn Ferry and Hay Group, whose research calculates that although salary increase forecasts are the same as in 2015 (2.5%), lower inflation levels (predicted at 0.2%) mean employees are set to have a 2.3% increase in real income.

However, the picture is mixed across sectors. Those working in fast-moving consumer goods (FMCG) industry can expect salaries to increase by 3% thanks to growing consumer confidence. In the oil and gas sector, however, low oil prices mean pay increases of only 0.6%.

Across Europe employees are set to see salary increases averaging 2.8%. Ukraine and Russia are expected to have the biggest wage rises in Europe, but high inflation means workers will not feel this in real terms.

Outside of Europe, Chinese workers will see real wage increases of 6.3%, but the picture is less rosy in Latin America where high inflation rates will cause real pay cuts of 1.4%.

Hay Group consultant Adam Burden said overall “the outlook is positive for workers” globally, although differing macro-economic conditions mean there are some “stark variations”.

“The majority of UK employees should feel optimistic,” he said. “Despite the sector variations and the fact that we’re still catching up after several post-recession years of shrinking real wages there will be a tangible increase in real income for many.”