Consumer price inflation in the UK is mounting, having reached 7.0% as of last month. But pay rises are not keeping pace, according to surveys by professional bodies. The latest set of findings, released on 18 April by the Chartered Management Institute, shows that annual pay settlements - the pay agreements between employers and unions - currently average around 2.8%. While the private sector is pulling the figure up with an average of 3.2% as compared to 2.4% in the public sector, this is still not enough to keep up with the cost of living.

Other survey findings, including estimates from 2021, show that the current pay raises are not only in line with last year's predictions but also noticeably higher than in previous years. For instance, the Chartered Institute of Personnel and Development said in mid-February that planned pay settlements for 2022 were the highest in a decade. However, these still do not match inflation, even before the war in Ukraine impacted supply chains worldwide and particularly in Europe.

Anthony Painter, Director of Policy at the Chartered Management Institute, warned that despite the spectre of wage inflation it is likely pay packets will be squeezed further and suggested that companies need to be "more imaginative" about retaining employees.

"Salaries are important but, as our research has shown, good, flexible working conditions are higher on employees' minds - thinking creatively right now is more important than many may think," he said.

The institute had previously released study findings showing that one in five employees are not happy about the way their managers decided their access to flexible working arrangements, and that "outdated attitudes" in a hybrid workplace may create or deepen inequalities.