Human resources data firm Brightmine said the median pay award held at 4% for a fifth month running, down from 6% over 2023 as a whole. — Reuters
LONDON: Pay deals awarded by British employers were steady in the three months to November and are likely to slow next year, as companies economise to meet higher tax bills introduced by the new government’s first budget, a survey shows.
Human resources data firm Brightmine said the median pay award held at 4% for a fifth month running, down from 6% over 2023 as a whole.
The survey added to signs of stubbornly high pay pressures in Britain’s economy. Official data showed an increase in the pace of earnings growth – something the Bank of England (BoE) is likely to note today when it announces its December interest rate decision.
All economists polled by Reuters think the BoE will keep rates on hold this week. The central bank has said the outlook for inflation will hinge in part on how companies respond to Finance Minister Rachel Reeves’ Oct 30 budget.
She increased the social security contributions paid by employers in order to finance more spending on investment and public services.
The increase kicks in from April next year – just as the minimum wage is due to rise by nearly 7%.
Brightmine, which previously forecast a median pay award of 3% for 2025, down from 4.5% for 2024, said nearly 40% of the employers it surveyed expected to reduce salary budgets in response to the budget.
“While it’s great to see pay awards are still being offered across all industries, there’s no doubt that businesses next year are facing a tough landscape and will have to make some difficult decisions,” said Sheila Attwood of Brightmine. — Reuters
