Real wages are set to grow by 3.1% in 2018, up from 2.6% last year, according to a new report from the Bank of England.

The report surveyed more than 360 businesses across the UK, accounting for approximately 845,000 employees. The Bank of England suggested that wages should begin to rise above the rate of inflation, which stood at 3% in January.

The increases in pay rises in 2018 are also expected to be broad-based, with only the construction sector expecting pay settlements in 2018 to be the same as in 2017.

The biggest expected increase in pay settlements is seen in consumer services. The report states that this is because many firms in this sector must increase pay to meet the National Living Wage. Companies also reported an increased tendency to pay above the NLW, due to competitive pressures. However, many firms were planning to limit management pay increases to 1%–2% in order to hold down their overall pay settlement.