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.
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Bank of England due Thursday, December 19, 2024:
