Finance
UK pay deals hold at 3% as employers eye next budget, Brightmine says
Published by Global Banking & Finance Review®
Posted on August 20, 2025
2 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on August 20, 2025
2 min readLast updated: January 22, 2026
UK private sector pay deals remain at 3% amid economic uncertainty and potential tax hikes, according to Brightmine's report.
LONDON (Reuters) -Pay settlements by British private-sector employers held at 3% in the three months to July and uncertainty about the economy and possible further tax increases means that cautious approach is likely to continue, wage data firm Brightmine said.
The figures represented the eighth monthly Brightmine report in a row to show the median private-sector pay deal was 3%. In the three months to July last year, settlements were 4%.
Sheila Attwood, Brightmine's HR insights and data lead, said employers were unlikely to take much comfort from official data last week showing Britain's economy grew by a stronger-than-expected 0.3% in the second quarter.
"Many employers are continuing to approach wage decisions with caution, keeping wage rises at 3%, in the face of continued economic uncertainty and the looming autumn budget," she said.
Numerous businesses have said they are being squeezed by April's tax increase. Finance minister Rachel Reeves is now back under pressure to plug an expected shortfall in the public finances later this year.
The Bank of England is watching pay growth closely as it tries to work out when and whether to cut interest rates again. It reduced borrowing costs earlier this month but suggested it might move more slowly going forward due to inflation pressures.
Brightmine used data from 19 pay settlements in the three months to July 31 covering more than 600,000 employees.
(Writing by William Schomberg; editing by David Milliken)
The current median pay settlement by British private-sector employers is holding steady at 3%, as reported by Brightmine.
In the three months to July last year, pay settlements were at 4%, indicating a decline in the median pay deal this year.
Employers are approaching wage decisions with caution due to ongoing economic uncertainty and the looming autumn budget.
Finance minister Rachel Reeves is under pressure to address an expected shortfall in public finances, exacerbated by recent tax increases.
The Bank of England is closely monitoring pay growth as it considers when and whether to cut interest rates again, following a recent reduction.
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