Published by Global Banking & Finance Review®
Posted on May 20, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GoogleUK employer pay rises remain at 3%, with signs of smaller raises as firms face economic pressures, according to Brightmine data.
LONDON (Reuters) -Pay settlements granted by British employers stayed at 3% in the three months to April but many firms are now offering smaller raises, according to figures from data firm Brightmine that are likely to be welcomed by the Bank of England.
Wednesday's data marked the fifth consecutive rolling quarter of pay awards at 3%, the weakest pace of increase since December 2021.
BoE officials are watching to see how employers react to a hike in their social security contributions - known in Britain as national insurance - and a sharp rise in the national minimum wage. Both took effect in April, a key month for pay deals.
Brightmine said nearly half of employers it surveyed offered pay rises below the median 3% level.
"Pay awards are stable, but beneath the surface, many businesses are opting for lower rises and our headline median could therefore fall in the months ahead," said Sheila Attwood, HR insights and data lead at Brightmine.
"The subdued pattern of pay settlements indicates that many employers continue to approach wage decisions with caution in the face of ongoing cost pressures that will continue into the second half of the year."
The BoE wants to see inflation pressure in Britain's jobs market abating sufficiently for it to carry on cutting interest rates. The central bank's chief economist Huw Pill said on Tuesday that the BoE's pace of rate cuts had been too fast.
Official figures due at 0600 GMT are likely to show the rate of headline inflation in Britain jumped in April due in large part to higher regulated prices for water and energy.
Brightmine analysed 136 pay settlements effective in the three months to April 30 covering more than 309,000 employees.
(Reporting by Andy Bruce; editing by William Schomberg)
Pay settlements granted by British employers have remained steady at 3% for the past three months, marking the weakest pace of increase since December 2021.
Employers are reacting to increased social security contributions and a sharp rise in the national minimum wage, leading many to offer smaller pay raises.
Nearly half of the employers surveyed by Brightmine reported offering pay rises below the median 3% level.
The Bank of England is looking for inflation pressure in the jobs market to decrease sufficiently to allow for continued interest rate cuts.
The subdued pattern suggests that many employers are cautiously approaching wage decisions due to ongoing cost pressures expected to persist into the second half of the year.
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