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UK will get best pay rise in 2012 - Mercer.

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London: UK workers will do marginally better than their continental colleagues next year, according to pay-data research by Mercer.

  • UK employers budgeting for 3% pay increase across employee groups
  • Wage inflation in Western Europe less than inflation for second year in a row

Employees in the UK will experience another year of below inflation pay rises in 2012, according to Mercer's latest pan-European pay data survey. UK companies are anticipating employee base pay rises of 3% while companies across Western European are predicting their employees will be given pay rises averaging 2.7% in 2012. This represents the lowest increase across the whole of the EMEA region (Europe, Middle East and Africa).

The data comes from the September edition of Mercer's TRS Quarterly Pulse Survey which analyses the pay plans of 329 multinational organisations operating across 69 countries in Europe, the Middle East and Africa. The survey provides information from multinationals on median base pay increases across all employee groups including 'blue' and 'white collar' workers up to management level.

UK employees are slightly better placed than many of their Western European peers, with companies in the country budgeting for a median 3% pay increase for staff across all employee groups. This is higher than is being forecast for many other Western European countries but far lower than is anticipated for staff in some regions of Africa, the Middle East and Central and Eastern Europe. Inflation in the UK is running at 5% so despite the salary increases, with high travel, petrol and food costs, employees will continue to feel under financial pressure. This picture is similar for many local markets.

"Salary increases in the UK are not keeping pace with the rising cost of living, and employees are finding it difficult," said Mark Quinn, Principal at Mercer. "But the economic situation is still volatile so organisations are being cautious with their fixed costs, such as salaries.

"Committing to higher salary increases reduces a company's flexibility and maneuverability if the economy does drop again. While restraint is painful for everyone in the short term, it is also prudent, and if it ensures the survival of the company it is in the longer term interests of employer and employee."

Full survey details are available here.

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