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Home > Finance > UK pay settlements edge up, hinting at more generous deals in 2026, Brightmine survey shows

UK pay settlements edge up, hinting at more generous deals in 2026, Brightmine survey shows

Published by Global Banking & Finance Review®

Posted on February 18, 2026

2 min read

Last updated: February 18, 2026

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Tags:Survey Compensation UK economy interest rates financial management

Quick Summary

UK pay settlements are rising, suggesting more generous deals in 2026 as businesses compete for staff, according to a Brightmine survey.

UK Pay Settlements Increase, Indicating Higher Deals Ahead for 2026

UK Pay Settlements and Economic Outlook

LONDON, Feb 18 (Reuters) - Pay settlements awarded by British employers have risen in value after a largely stable 2025, suggesting the start of a shift towards higher deals this year as businesses compete for staff, data provider Brightmine said on Wednesday.

Current Pay Trends

The median basic pay award of 3.2% in the three months to the end of January represented a marginal increase from the 3% level recorded over 2025 as a whole, Brightmine said.

Bank of England's Interest Rate Considerations

The Bank of England is monitoring pay growth as it considers when to resume its cuts to interest rates. A broader measure of pay in official data published on Tuesday showed a slowdown in earnings growth in the last three months of 2025.

Brightmine said:

* Two-fifths of the latest pay awards were up from theprevious year * Two-thirds of all settlements were worth between 3% and 4% * Challenges facing the economy mean employers are likelyto maintain a cautious approach to pay * April's minimum wage increase will leave less headroom forpay progression elsewhere * The data, collected between November 1 and January 31, wasbased on 59 pay awards representing just over 238,000 UKemployees

(Writing by William Schomberg; editing by Suban Abdulla)

Key Takeaways

•UK pay settlements have increased slightly in early 2026.
•Median pay awards rose to 3.2% from 3% in 2025.
•The Bank of England is monitoring pay growth for interest rate decisions.
•Two-fifths of pay awards increased from the previous year.
•April's minimum wage hike may limit further pay increases.

Frequently Asked Questions about UK pay settlements edge up, hinting at more generous deals in 2026, Brightmine survey shows

1What is the role of the Bank of England?

The Bank of England is the central bank of the UK, responsible for setting monetary policy, including interest rates, to maintain economic stability and control inflation.

2What are interest rates?

Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the amount borrowed or saved, influencing economic activity.

UK Pay Settlements and Economic Outlook

Current Pay Trends

The median basic pay award of 3.2% in the three months to the end of January represented a marginal increase from the 3% level recorded over 2025 as a whole, Brightmine said.

Bank of England's Interest Rate Considerations

Brightmine said:

(Writing by William Schomberg; editing by Suban Abdulla)

Key Takeaways

•UK pay settlements have increased slightly in early 2026.

•Median pay awards rose to 3.2% from 3% in 2025.

•The Bank of England is monitoring pay growth for interest rate decisions.

•Two-fifths of pay awards increased from the previous year.

•April's minimum wage hike may limit further pay increases.

Frequently Asked Questions

1What is the role of the Bank of England?

The Bank of England is the central bank of the UK, responsible for setting monetary policy, including interest rates, to maintain economic stability and control inflation.

2What are interest rates?

Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the amount borrowed or saved, influencing economic activity.