Private sector workers in the UK anticipate to see a real salary increase of just 0.2% in 2018, only employees in Hungary, Portugal, and Ukraine are likely to be worse off

Great britain pound currency picture id825288366

According to the latest Salary Trends Report by ECA International (ECA), UK employees can expect to see a salary increase of approximately £4.41 a month (£53 pa) before tax. In terms of rankings, the UK is 23rd out 26 countries in Europe.

The report calculates the real salary increase based on the difference between the forecast nominal salary increase (2.8% in the UK) and inflation (2.6%).

Steven Kilfedder, production manager at ECA International said: “Productivity growth in the UK has remained low in recent years so employers have not been able to offer the level of salary increases that they have been able to in the past. This, combined with higher inflation, which is expected to be 2.6 percent next year, has caused something of a pay crunch for UK workers.”

This forecast is particularly worrying for employers who already anticipate Brexit affecting their ability to recruit and retain top talent in the UK. This news may tempt UK workers to look further afield for better paying employment opportunities.

Russia is forecast to take the top spot of salary increase ranking in Europe in 2018. With the economy in Russia stabilising and inflation falling, employees in Russia are set to receive a 3.1% real salary increase next year.

The table below reveals the European regional rankings for nominal and real wage increases in 2018:

 European rank 2018Global rank 2018

Countries

Real wage increase

Nominal salary increase

Real wage increase

Nominal salary increase

Russia

1

2

11

15

Bulgaria

2

4

20

42

Switzerland

3

24

33

69

Italy

4

14

34

58

Germany

5

12

35

56

Czech Republic

6

8

37

46

Luxembourg

6

14

37

58

Slovakia

6

8

37

46

Denmark

9

14

40

58

Netherlands

9

14

40

58

Finland

11

20

43

64

Irish Republic

12

14

45

58

France

13

21

48

65

Sweden

14

14

49

58

Poland

15

7

51

45

Austria

16

13

52

57

Norway

17

10

53

54

Belgium

18

21

56

33

Romania

18

3

56

65

Spain

18

21

56

65

Greece

21

26

59

71

Serbia

22

5

60

43

United Kingdom

23

10

61

54

Hungary

24

6

62

44

Portugal

25

24

63

4

Ukraine

25

1

63

69

 

In terms of the rest of the world Asia- Pacific countries continue to lead the way, with eight countries in the region taking the top ten spots in global rankings. China is forecast to rank seventh in the world despite reduced economic growth. India is set to be the highest ranked in the region, with a 4.9% real salary increase predicted.

The only country to outdo India in global rankings is Argentina, which has been forecast to have an impressive 7.2% salary increase in 2018,

Kilfedder added, “President Macri’s market-friendly policies are expected to bear fruit in Argentina next year, causing inflation to cool and bringing respite to hard-pressed workers after years of low or negative real salary increases. As a result, Argentina has jumped 22 places in the 2018 global rankings, topping the chart for the highest real salary increase in the world.”

The table below reveals the forecast rankings for the Global top 20 real wage increases:

 Global Rank

Countries

Real wage increase 2018

Nominal salary increase 2018

Argentina

1

1

India

2

6

Ghana

3

2

Indonesia

4

9

Vietnam

4

8

Thailand

6

24

China

7

20

Bangladesh

8

7

Pakistan

8

10

Cambodia

10

15

Russia

11

15

Brazil

12

15

Philippines

12

20

Singapore

14

33

Korea Republic

15

29

Taiwan

15

33

Sri Lanka

17

14

Israel

18

46

Morocco

19

33

Bulgaria

20

42

Malaysia

20

23

The imminent introduction of VAT in the countries of the Gulf Cooperation Council has raised inflation forecasts. Saudi Arabia and Qatar are particularly affected with both anticipated to experience real salary decreases as a result, dropping from among the highest ranked nations in the region in 2017 to the lowest in 2018.