Pay increases offered by British employers remained steady at 4% in the three months leading up to November, but they are expected to slow in 2025 as companies adjust to higher tax burdens introduced in the government’s latest budget, according to a Brightmine survey.
Current Pay Trends:
Median pay awards held steady at 4% for the fifth consecutive month (down from 6% in 2023).
Future Outlook:
Pay growth likely to slow in 2025 due to higher employer taxes and a 7% minimum wage increase starting in April.Brightmine forecasts median pay awards at 3% for 2025, down from 4.5% for 2024.
Economic Context:
Rising wage pressures persist; official data shows earnings growth accelerating.Bank of England expected to hold interest rates in December (the meeting is Thursdat this week); inflation outlook depends on employer responses to fiscal changes.
Employer Response:
40% of employers surveyed plan to reduce salary budgets following the government’s budget measures.
Survey Details:
Based on 22 pay awards (Sept–Nov), covering approximately 227,000 employees.
****
Bank of England due Thursday, December 19, 2024:
This article was written by Eamonn Sheridan at www.forexlive.com.
