According to a recent survey, the percentage of pay awards given by UK employers has dropped to its lowest level in nearly two years.
Incomes Data Research found that the median wage deal reached by organizations fell to 4% during the three-month period ending in July. This is a decrease of 0.8 percentage points compared to the three-month period ending in June and the lowest level since August 2022.
These figures do not include the settlements reached in April. This is usually when new agreements are made. In this month’s awards, 16% were for 9% and more. This is partly due to a 9.8% rise in the minimum wage.
IDR’s senior researcher Zoe Woolacott stated that wages were not keeping pace with the rise in cost of living during the last two years. This is despite the fact that consumer price inflation has now reached the Bank of England target of 2%.
She stated: “Prices of items like food, mortgages and rents remain higher than they were before the pandemic.” It is therefore important that employers continue to put pressure on their employees to give them a wage increase to compensate for the increased cost of living.
The BoE will likely keep its interest rate at 5% next week, as it closely monitors the growth of pay. The BoE is expected to keep interest rates at 5% next week, while closely monitoring pay growth.
The Office of National Statistics released figures on Tuesday (10th September) that showed UK wage growth had slowed over the past three months, falling to 5,1%. This is its lowest level for more than two year. It was last in the quarter ending June 2022 that it fell below this level, at 4.7%.
The IDR survey covered 39 pay settlements that took effect between the 1st of May and the 31st of July 2024. This included more than 700 000 employees.
Subscribe to our weekly HR news and guidance
Every Wednesday, receive the Personnel Today Direct newsletter.
Personnel Today has the latest HR job openings.
Browse Human Resources Jobs
