Pay: Firms fight back with counteroffers to keep staff

About 40% of employers have made counteroffers to keep hold of staff tempted by higher wages from rivals in the past 12 months, a survey has found.

However, it expects the use of counteroffers to increase as businesses try to recruit new staff and retain existing workers. In its most recent figures, the ONS said average pay rose by 7.3% but, when taking inflation into account, fell by 0.8%. The latest data on pay and vacancies will be released on Tuesday when the ONS publishes employment figures.

Prof Hilary Ingham, economics professor at University of Lancaster, said pay deals in the private sector were running at about 8%, "which is going to be above the rate of inflation so then this is going to be a danger that that is going to further fuel inflation so you're going to get this wage-price spiral".

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