UK employers maintain 4% median pay award for 5th month

UK employers kept pay deals steady in the three months to November, with the median pay award remained at 4 per cent for the fifth consecutive month, according to a survey by HR data firm Brightmine.

This marks a slowdown from the 6 per cent average over 2023, reflecting the ongoing pressure on wages in the UK economy.

The survey highlighted concerns about rising costs, as employers brace for higher tax bills following the government’s budget announcement in October, which increased social security contributions.

Nearly 40 per cent of companies surveyed expect to cut salary budgets in response to these changes, which will take effect in April 2025, coinciding with a near 7 per cent rise in the minimum wage.

Brightmine forecasts a further slowdown in pay awards, predicting a median increase of 3 per cent for 2025. This comes as companies face a challenging economic environment and tough spending decisions.

The data, based on 22 pay awards covering 227,000 employees, adds to concerns over inflation as the Bank of England prepares to announce its interest rate decision later this week.

Attribution: Reuters