UK DATA
- Brightmine (previously XpertHR) median basic pay awards in the 3 months to the end of July fell to +4.5% - returning to the lowest level seen this year in March (vs a revised +5.0% in the prior rolling quarter - originally +4.9% Y/Y 3 month average),
- In particular, the interquartile range for pay deals has narrowed falling between 3.7% and 5.0% - compared to a range between 4% and 6% in the previous three consecutive rolling quarters.
- This data points to the renewal in the softening in wage growth relative to both the last few months and last year, in part due to falling inflation particularly services which fell from 5.7% Y/Y to 5.2% in July. Note that last week's official ONS private sector regular wages number came broadly in line with consensus at 5.2% 3M Y/Y (vs 5.6% prior) although marginally higher than the BOE's forecast of 5.1%.
- Also to note however, Brightmine found that public sector pay saw the median pay award on the 12 months to July 2024 reach 6.1% (vs 5% recorded in the private sector), following Chancellor Reeves recently approved 5.5% pay rise for public sector workers, which may pose an upside risk to wage growth in the coming months.
- Overall, whilst there is the consideration of upside pressure from public sector wages Brightmine notes "expectations remain that pay awards, in general, will continue to slow. A further decrease in pay settlements is predicted for 2025 compared to those seen in the previous two years."
- Data were collected between 1 May and 31 July 2024, based on a total of 48 pay settlements, representing 743,755 employees.
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