LONDON: British employers gave staff the joint-lowest pay rises since June 2022 in the three months to the end of August, offering a median raise of 4%, figures from human resources data company Brightmine showed on September 24 .
The figures are broadly in line with other pay surveys and official data showing a continued slowing of pay growth now inflation has returned to near the Bank of England’s 2% target.
Interest rates
The BoE is watching pay growth closely as it awaits further signs that inflation pressures are weakening before it cuts interest rates again.
“Employers that have made pay awards so far this year have already reacted to the falling inflation environment by putting in place lower pay awards than made last year,” said Sheila Attwood, senior content manager at Brightmine.
The 4% annual increase in the three months to August was the same as the figure for the three months to July, which was revised down from an earlier estimate of 4.5%.
Official figures showed that growth in average weekly earnings, excluding bonuses, was the slowest in more than two years in the three months to July at 5.1%.
A BoE survey of businesses over the three months to August expected to raise wages by 4.1% over the next 12 months.
Brightmine – formerly known as XpertHR – said the data for the three months to August was based on 67 pay awards covering 900,000 employees.
Concerns over taxes
Meanwhile, British businesses reported a slowdown in growth this month as some firms feared higher taxes, according to a survey that also showed waning price pressures, potentially encouraging the Bank of England to consider cutting interest rates again. However, economists broadly saw the data as pointing to a return to a more sustainable growth pace after a post-recession bounce earlier in the year – in contrast to a much weaker performance in the euro zone this month.
S&P Global said the biggest concern voiced by firms related to uncertainty about the Oct. 30 budget when new finance minister Rachel Reeves will publish her first tax and spending plans.
