UK Pay Settlements Cool to 3% as Employers Face Rising Costs
UK employers' median pay awards fell to 3.0% in the three months to August, signalling a softer labour market and easing domestic inflation pressures.
British employers' pay settlements have cooled, with the median award falling to 3.0% in the three months to August, according to data from human resources firm Brightmine. The figure was revised down from 3.2% in the three months to July and held steady through August, pointing to a softening labour market as businesses grapple with higher employment costs and tighter budgets.
Sheila Attwood, Brightmine's HR insights and data lead, said pay awards appear stagnant and that this trend looks set to define the year. She noted that pay growth is settling at 3% and there is little reason to expect a significant shift in the medium term.
The data may offer some reassurance to Bank of England officials weighing domestic inflation pressures as they consider an interest rate hike in November. Employers are forecasting median pay awards of 3% for the year ahead, compared with realised awards of 3.2% for the year to August 31.
Brightmine also found that pay settlements were tightly clustered, with 71% of awards falling between 3% and 4%. The August figures were based on 45 pay awards implemented between June 1 and August 31, covering more than 755,000 UK employees.