UK pay awards hold at 2-year low, IDR survey shows
2024.10.01 19:37
LONDON (Reuters) – Pay settlements awarded by British employers held at their lowest in two years in the three months to August, according to a survey that could reassure the Bank of England as it considers whether to cut interest rates again.
Incomes Data Research said on Wednesday that the median pay settlement awarded by major employers held at 4.0% for the second month in a row.
Median pay awards in the public sector stood at 4.5%, above those in the private sector which slowed to 4.1%.
“The differing outcomes in the private and public sectors reflect the cycle of pay between the two, with the public sector currently in the ‘catching-up’ phase, after a lengthy period in which pay awards lagged behind those in the private sector,” Zoe Woolacott, senior researcher at IDR, said.
Finance minister Rachel Reeves announced above-inflation pay increases worth 9.4 billion pounds ($12.53 billion) for public sector workers including teachers and doctors shortly after the Labour Party won a parliamentary election in July.
Official figures last month showed British private sector wage growth cooled to a more than two-year low of 4.9% in the three months to July.
The BoE is monitoring wage growth, and expects private-sector pay to slow to 3% in late 2025.
The central bank, which cut its key Bank Rate in August for the first time since 2020 but kept it at 5% on Sept. 19, is expected to lower borrowing costs by a further quarter point at its November meeting.
The IDR analysis was based on 39 pay deals which covered more than 740,000 workers between June 1 and Aug. 31.
($1 = 0.7505 pounds)
