Businesses across the US are broadening pay rises as inflation gallops at the fastest pace in 40 years, as employees struggle to match their wages with consumer prices.

Retailers, airlines and resorts are boosting starting pay to attract recruits and offering company-wide bumps to staff’s base pay. Some 92 per cent of businesses plan to increase employee pay this year, up from 85 per cent in 2021, according to compensation analysis firm PayScale.

Announcements from corporate America confirm trends reported in official data as US inflation reached 7.9 per cent in February, the highest level since 1982. Federal Reserve chair Jay Powell said that wages were “moving up at ways that are not consistent” with its 2 per cent inflation target after the central bank decided to raise interest rates this month.