MNI INTERVIEW: UK Pay Deals Slow To Around 5% In H1-Brightmine
Head of leading pay survey says increases slow in Q1, but look to be steadying at around 5% .
UK pay increases are settling at around 5% in the first three months of 2024 and look set to continue at about that pace throughout the first half of the year, the head of a leading survey of wage negotiations told MNI.
Deals for the three months to March came in at 4.8%, after an upwardly-revised 5.0% in February, and down from levels around 6% late in 2023, said Sheila Attwood of Brightmine, formerly known as XpertHR. (see MNI INTERVIEW: Better ONS Data Suggest Easing UK Labour Market)
“Although there has been a noticeable drop in the level of pay awards when compared to the peak of 6% recorded last year, there are now signs of stability starting to emerge," Attwood said in an interview.
REAL PAY INCREASES
Awards are now starting to creep above inflation as that rate falls to 3.8%, she noted. Many companies are also looking at their overall compensation offering as they battle skills and labour shortages across the economy. (see MNI INTERVIEW: UK Consumers Upbeat On Personal Finances - GfK)
At the October 2022 height of the current cost-of-living crisis, CPI inflation stood at 11.1% and median pay awards at 5%.
However, more than half of deals in the first three months of the year were worth less than the previous corresponding deal, she noted.
FIVE PERCENT LEVEL
Early April settlements are also starting with a median basic award of 5%, Attwood added.
"This, alongside the upward revision to the number for the three months to February, cements our view that pay awards will centre on the 5% mark over at least the first half of 2024,” she said.
Wages growth remains a concern for policymakers at the Bank of England as they tackle above-target inflation.
Official data from the Office for National Statistics showed total wages grew a nominal 5.6% in the three months to February, with real total wages up 1.8% against CPI.