UK pay settlements edge lower in first quarter, industry survey shows
7:05 pm Tuesday, April 23rd, 2024
LONDON (Reuters) – British employers reached slightly lower pay settlements with staff in the three months to the end of March, although early figures for April suggest they picked up again, an industry survey showed on Wednesday.
Median basic pay settlements in the first quarter of 2024 were 4.8% higher than a year earlier, the smallest rise since the third quarter of 2022 and down from 5.0% in the three months to February, human resources data provider Brightmine said.
Brightmine is a new name for XpertHR, which has pay settlement data going back more than 30 years.
The Bank of England is closely watching pay data. Before they cut interest rates, most BoE policymakers want to see signs that annual wage growth is heading back to the 3-4% range from the most recent rate of 6%.
However settlements so far in April – usually the busiest month for pay deals – suggest annual growth had returned to 5%.
“This cements our view that pay awards will centre on the 5% mark over at least the first half of 2024,” Brightmine senior content manager Sheila Attwood said.
Employers surveyed by Brightmine last month expected the median pay award for 2024 to be 4%, while a BoE survey showed employers anticipate pay growth of 4.9% over the coming year.
Separate figures from the British Chambers of Commerce, also released on Wednesday, showed 66% of businesses reported recruitment difficulties, the lowest percentage in three years.
A tight labour market since the COVID-19 pandemic boosted wages, although they did not keep up with inflation.
The BCC data was based on responses from a survey of 4,600 firms between Feb. 12 and March 12, while the first-quarter data from Brightmine was based on 142 pay settlements covering just under 400,000 employees.
(Reporting by David Milliken; editing by William James)
