Finance
UK firms' wage growth expectations stick near four-year low in February, BoE survey shows
Published by Global Banking & Finance Review®
Posted on March 5, 2026
2 min readLast updated: March 5, 2026
Quick Summary
UK firms’ expected year‑ahead wage growth held steady at 3.6% in February — the joint‑lowest since the survey began in 2022 — underscoring easing pay pressures as the Bank of England eyes interest‑rate cuts.
UK firms' wage growth expectations stick near 4-year low in February, BoE survey shows
Bank of England Survey Highlights on Wage Growth and Economic Outlook
Overview of Wage Growth Expectations
LONDON, March 5 (Reuters) - British employers' expectations for wage growth held at their joint-lowest in nearly four years in February, according to a survey published by the Bank of England, which is looking out for further signs of a slowdown in pay pressure before it next cuts interest rates.
Expected year-ahead wage growth remained at 3.6% on a three-month moving-average basis in February, the joint-lowest reading since the series started in 2022, the monthly Decision Maker Panel survey showed on Thursday.
Price and Staffing Projections
Price Growth Expectations
Companies' expectations for how much they would raise their own prices in the coming 12 months inched down, falling by 0.1 percentage points to 3.4% in the three months to February.
Staffing Level Forecasts
Companies also said they expected to expand staffing levels by 0.1% over the coming year.
Implications for Monetary Policy
Bank of England's Interest Rate Outlook
The central bank is closely monitoring wage growth as it tries to gauge how much inflation pressure remains in the economy and is expected to keep interest rates at 3.75% this month after holding them in February.
Market Reactions and Rate Cut Expectations
Investors trimmed their bets on interest rate cuts by the Bank of England this week and are only pricing in one quarter-point cut this year as the U.S.-Israeli war on Iran continued to stoke fears about inflation.
Survey Context
Timing of the Survey
The BoE survey was conducted before the most recent Middle East conflict started.
Reporting and Editing Credits
(Reporting by Suban Abdulla; editing by David Milliken)
Key Takeaways
- •Expected year‑ahead wage growth remained at 3.6% in February, marking a joint‑lowest since 2022 (bankofengland.co.uk)
- •The Bank of England is closely watching softening wage expectations as evidence of easing inflationary pressures ahead of potential rate cuts (investing.com)
- •Realised private‑sector wage growth has been moderating, with forecasts projecting further decline toward target‑consistent levels (moneyweek.com)
References
Frequently Asked Questions about UK firms' wage growth expectations stick near four-year low in February, BoE Survey shows
1What did the Bank of England survey reveal about UK wage growth?
The survey showed that expected year-ahead wage growth stayed at 3.6% in February, the joint-lowest since the survey began in 2022.
2How long have UK wage growth expectations remained low?
They have stayed at their joint-lowest level in nearly four years, according to the Bank of England's monthly Decision Maker Panel.
3Why is the Bank of England monitoring wage growth expectations?
The Bank is watching wage growth as a key indicator before deciding when to cut interest rates.
4When was the Bank of England survey on wage growth published?
The survey was published on March 5, 2024.