How to avoid the wage spiral

The global economy is not in a great place right now. Products and materials are in short supply. And if it can be found, labour is in demand while energy prices are exorbitantly high despite being on a downward trend – for the moment. Then there's the matter of rising tax burdens and interest rates which seem to complete the perfect storm.

So, it is easy to understand why workers want not just a pay increase, but one that protects against inflation. Simply put, many are having difficulty providing their families with essentials such as food, fuel, and heating.

A director at law firm Walker Morris, Lucy Gordon, is aware of the current issues for both companies and employees.

‘Most employees’, she reports, ‘expect an annual pay increase at least in-line with inflation, which is currently running at its highest rate in 40 years. So, it's entirely understandable that employers can't afford to be offering 9 or 10% pay increases at the moment, particularly given that employers face national insurance contributions on top’.