UK pay awards tick up to 3.1%, but Brightmine sees no change in wage trend

what happened

Median pay awards agreed by UK employers climbed to 3.1% in the quarter closing in late September, according to HR data provider Brightmine, which published its findings on Wednesday. The reading was up from 3.0% in the periods ending in July and August, yet still below the pace recorded earlier this year.

The previous day, official figures showed private-sector wage growth picking up for the first time since late 2024, a development that strengthens the argument for a Bank of England rate increase in November. Brightmine's survey also found that most settlements did not exceed the previous year's awards, and that increases of about 3% are expected in 2027.

Higher social security payments by businesses are limiting firms' room to manoeuvre, and a rise in the minimum wage could add further strain to budgets. Brightmine examined 42 settlements made between July 1 and September 30, covering more than 650,000 workers.

why it matters

For markets, the data point to steady rather than accelerating domestic pay pressure, which matters for the Bank of England's rate path and for sterling and gilts. Pay dynamics feed directly into inflation expectations, keeping the November decision in focus.

market impact

GBP and gilts: steady pay growth feeds into expectations for Bank of England policy.

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