Average advertised salaries in Britain rose to a record £40,846 last month, according to the latest data from the job search engine Adzuna. The 7.02 per cent annual rise in January exceeded inflation, amid intense competition for workers in key sectors such as manufacturing, maintenance and retail.
Andrew Hunter, the co-founder of Adzuna, said sectors driving this wage growth “reflect the increasing competition for talent in key areas, even as overall hiring slows.” The data shows maintenance salaries rose by 2.24 per cent month-on-month and 19.09 per cent year-on-year, while retail salaries increased by 2.35 per cent in a month and 14.47 per cent compared to January 2024. Manufacturing salaries followed closely behind, climbing by 2.35 per cent over the month and 10.35 per cent year-on-year.
Rising pay in these sectors stems primarily from tightening labour markets, heightened minimum wage requirements, and competition among employers to retain staff in the face of elevated living costs. Official figures published last week indicate that average earnings (excluding bonuses) grew by 5.9 per cent across the economy during the three months to December, up from 5.6 per cent in the previous quarter. Wage trends are closely monitored by policymakers due to their effect on inflation, with the Bank of England noting that earnings would need to drop closer to 2-3 per cent annually to help bring consumer price growth back to its 2 per cent target.
Despite the uptick in pay across various sectors, the hospitality industry is raising concerns over employment costs. Industry leaders warn that new government policies could force businesses to reduce staffing levels. In October, the government announced plans to raise employers’ National Insurance contributions (NICs) by 1.2 percentage points to 15 per cent from April, alongside reducing the earnings threshold at which employers begin paying contributions from £9,100 to £5,000.
A group of trade bodies, including the British Beer and Pub Association, the British Institute of Innkeeping, Hospitality Ulster and UKHospitality, argue that these changes will add unsustainable pressure on a sector already struggling with rising costs. They point to a joint survey conducted by NIQ in January, covering 8,300 hospitality sites, which suggests that 70 per cent of businesses expect to cut employment because of the new tax burdens. Another 60 per cent plan to cancel investments, while 29 per cent intend to reduce trading hours, and 15 per cent anticipate closing at least one site.
A quarter of surveyed businesses also reported having no cash reserves left, a figure that has risen by six percentage points since October. Industry spokespeople say the government “should not be piling on costs” at a time when hospitality has been a major contributor to economic growth, warning that additional taxes risk jobs and hamper their ability to invest.
The Treasury, however, insists it is supporting pubs and restaurants in other ways. A spokesman pointed out that draft pints will benefit from a 1p cut in alcohol duty, that 40 per cent relief or full protection from business rates will continue for certain establishments, and that many smaller employers “will see no change” in their National Insurance bills. He added that the government’s plan is “going further and faster to kick-start economic growth and raise living standards,” citing businesses that remain optimistic about the chancellor’s efforts to encourage investment.
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Record-high average advertised salaries reach £40,846 as staff shortages push pay above inflation