Posted By Uma Rajagopal
Posted on September 20, 2024
LONDON (Reuters) – British employers plan to scale back pay increases next year, according to a survey that is likely to encourage the Bank of England as it seeks further signs that inflation pressures in the economy are easing.
Almost two thirds of employers are planning to offer employees smaller pay increases in 2025 than in 2024, according to the survey by Incomes Data Research, an independent data and analysis organisation.
Last year, 53% of employers said they intended to scale back pay rises.
The BoE, which held interest rates at 5% on Thursday after cutting them in August, is watching wage growth closely as it moves cautiously with further reductions in borrowing costs.
IDR said 45% of organisations plan to raise pay by between 3% and 4% in 2025 as the scarcity of candidates to fill jobs eases a bit and inflation weakens.
The survey was based on responses from 100 employers, 72% of whom were in the private sector.
IDR said earlier this month that the median pay settlement awarded by major employers dropped to 4.0% in the three months to July, the lowest since August 2022 and down from 4.8% in the three months to June.
(Writing by William Schomberg; editing by David Milliken)
