British employers plan to increase pay at the weakest rate since 2013, a survey showed on Monday, offering poor prospects for British households already strained by higher inflation since last year's Brexit vote. Employers on average expected to raise basic pay awards in the year ahead by 1.0 percent, down from 1.5 percent in the previous quarter's survey, the Chartered Institute of Personnel and Development (CIPD) said.

Last week Bank of England Governor Mark Carney warned that households faced a challenging time, as wage growth was set to turn negative in inflation-adjusted terms. Rising inflation, fuelled by rising energy costs and the pound's post Brexit vote plunge, almost completely cancelled out the growth in pay of British workers during the three months to February, official data showed last month.

Living standards are a hot political topic ahead of a June 8 national election. Prime Minister Theresa May will promise on Monday to extend British workers' rights in a push to win over supporters of the opposition Labour Party. While the BoE's expectation for solid economic growth in the next few years hinges on wage growth picking up significantly, the CIPD survey showed no sign that employers are thinking about ratcheting up pay as yet. Gerwyn Davies, labour market adviser at the CIPD, said weak pay partly reflected British businesses' long-standing difficulties at raising productivity, and said he expected living standards would fall for many employees this year.

Copyright Reuters, 2017