British private sector employers plan to raise wages by 2.8% this year compared with 2.4% in 2015, a Bank of England survey showed on Wednesday, offering policymakers some assurance that wages will pick up in line with their forecasts.

BoE Governor Mark Carney has said chunkier wage rises are one likely precondition for increasing interest rates. Growth in Britons' average earnings reached 3 percent in mid-2015 but slowed later in the year.

Last week the central bank trimmed its wage growth forecast and said average weekly earnings would rise at an annual rate of 3% by the end of 2016, compared with an average of more than 4% before the financial crisis that began in 2007.

The BoE's annual survey of employers covered 342 firms with a total of 600,000 staff. The survey responses are adjusted to make them representative of private-sector firms in the economy as a whole.

The increase in wage settlements was expected to be biggest in the consumer services sector, where retailers and restaurants are exposed to larger-than-normal increases in the minimum wage.

"Broadly consistent with the expected pickup in settlements, a net balance of nearly 40% of respondents expected total labour cost growth per employee to increase in 2016, compared with an equivalent figure of just over 20% in last year's survey," the Central Bank said. (Reuters)

Source: www.businessworld.ie