UK firms expect to give 5% pay rises this year amid worker shortages

Survey figure is highest in at least a decade as businesses face pressure to help staff in cost of living crisis

UK employers expect to give workers pay rises of 5% this year, the highest in at least a decade, according to a survey of more than 2,000 businesses.

Against a backdrop of worker shortages, more than half of employers said they expect to raise base or variable pay further in 2023 to better recruit and retain staff, according to the Chartered Institute of Personnel and Development (CIPD), a body representing employers. However, expectations for public sector pay rises are lower.