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The CIPD Summer 2017 Labour Market Outlook suggests that while employment will grow strongly in the third quarter of 2017, wage growth is set to remain weak with median pay rises forecast at just 1% over the coming year.

Looking more closely at pay, in the private sector, almost a quarter of firms cite delivering the National Living Wage (23%) as a brake on pay growth, a further fifth (21%) cite uncertainty over access to the single market, and a fifth (21%) reference the government’s auto-enrolment pensions scheme as acting as a challenge. More than a fifth of firms (21%) also report that affordability is weighing pay down. This chimes with the Bank of England’s latest economic forecast which pointed to Brexit uncertainty and weak productivity as influencing factors on employers’ plans to award pay increases. Around three-quarters of public sector employers (72%) say that restraint in the public sector is the main reason why they cannot match the inflation rate target of 2% in their next basic pay award.

The CIPD also points to the fact that employee expectations as to what they’ll receive are weaker this year compared with last year, suggesting that employers are not coming under any additional pressure to raise pay.

It’s not all doom and gloom however. There are ‘very tentative’ signs that wage growth will pick up modestly. The median for all basic pay decisions that have been undertaken in the first six months of 2017 is 1.5%. The other indicator of modest upward pay pressure is the average basic pay expectations indicator, which has risen to 1.7% from 1.5% over the past three months.