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Pay settlements awarded by British employers remained steady at their lowest level in two years during the three months to August, according to a recent survey. Incomes Data Research reported that major employers maintained a median pay settlement of 4.0% for the second consecutive month, with public sector pay awards slightly higher at 4.5% compared to a slower private sector growth of 4.1%.
Zoe Woolacott, a senior researcher at IDR, noted the disparity between public and private sector pay, attributing it to the public sector’s current “catching-up” phase following a period of lagging behind private sector pay. This comes after a recent announcement by finance minister Rachel Reeves of above-Inflation pay increases totaling £9.4 billion for public sector workers, including teachers and doctors.
Official figures also revealed that private sector wage growth in Britain had cooled to a more than two-year low of 4.9% in the three months to July. The Bank of England is closely monitoring wage growth and anticipates a slowdown in private sector pay to 3% by late 2025.
The IDR analysis, based on 39 pay deals covering over 740,000 workers between June and August, provides insights into the current pay landscape. With expectations of further interest rate cuts by the BoE, the economic outlook for wage growth remains a critical factor in shaping monetary policy decisions.
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Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.
