UK employers maintain pay offers at 4% earlier than anticipated fall in 2025, survey reveals

(Reuters) – Pay offers awarded by British employers had been regular within the three months to November and are more likely to sluggish subsequent yr as firms economise to fulfill increased tax payments launched by the brand new authorities’s first funds, a survey confirmed on Wednesday, 

Human sources information agency Brightmine mentioned the median pay award held at 4% for a fifth month operating, down from 6% over 2023 as a complete.

The survey added to indicators of stubbornly excessive pay pressures in Britain’s financial system. Official information on Tuesday confirmed a rise within the tempo of earnings progress – one thing the Financial institution of England is more likely to observe on Thursday when it declares its December rate of interest determination.

All economists polled by Reuters assume the BoE will preserve charges on maintain this week. The central financial institution has mentioned the outlook for inflation will hinge partly on how firms reply to finance minister Rachel Reeves’ Oct. 30 funds.

She elevated the social safety contributions paid by employers to be able to finance extra spending on funding and public companies. The rise kicks in from April subsequent yr – simply because the minimal wage is because of rise by practically 7%.

Brightmine – which beforehand forecast a median pay award of three% for 2025, down from 4.5% for 2024 – mentioned practically 40% of the employers it surveyed anticipated to cut back wage budgets in response to the funds.

“Whereas it is nice to see pay awards are nonetheless being supplied throughout all industries, there isn’t any doubt that companies subsequent yr are dealing with a tricky panorama and should make some tough selections,” mentioned Sheila Attwood, Brightmine senior content material supervisor. 

The newest information was primarily based on 22 pay awards between Sept. 1 and Nov. 30, overlaying round 227,000 workers.