UK wages to rise 3% in 2018

UK wages to rise 3% in 2018


UK workers are in line for their biggest pay rises since 2008 this year as a higher minimum wage kicks in, said the Bank of England.

Last week the Central Bank said interest rates would probably need to rise sooner and by somewhat more than it had previously thought to control above-target inflation.

Firms plan to offer average pay settlements of 3.1%, compared with 2.6% last year, according to its survey.
Britain’s minimum wage for those aged 25 and over is due to rise by 4.4% in April to £7.83 (€8.81) an hour, while pay for some younger workers will rise by over 5%.

Higher-paid staff are less likely to benefit, with businesses trying to limit basic increases in management pay to 1% to 2% to keep down overall bills, the bank said.

Meanwhile, other Brexit-related stress means there is no let-up in sight for listed UK real estate agents and the companies could find themselves the targets of a wave of takeover activity.

So say industry analysts and executives, who note that traditional players like Foxtons Group and Countrywide face a stagnant housing market while losing market share to online competitors. Investors are running out of patience — their shares have tumbled by about a quarter and more than half in the past year, respectively, compared with a modest gain in the Ftse Small-Cap Index.

The largest brokers need to look for ways to cut costs, and merging with another company or an investor is one option, according to ETX Capital’s Neil Wilson. “A merger of equals or a takeover are definitely options that would make sense, given what the market conditions and share prices are,” said Mr Wilson.

Countrywide is Britain’s largest real estate broker, while Foxtons is a bellwether of the key London market. As such, the companies are at the centre of the talk about mergers and acquisitions. Research by accountancy and advisory network Moore Stephens indicates that 19% of estate agents in the UK show warning signs of becoming insolvent.

“From a private-equity point of view, Countrywide and Foxtons tick a lot of boxes,” said Christopher Millington, an analyst at Numis Securities in London, with a buy rating on Foxtons and a hold rating on Countrywide.

Britain’s housing market is poised for a lifeless 2018, weighed down by Brexit-linked uncertainty, tax changes, stretched affordability and the Bank of England’s November rate hike.

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