According to a survey by Brightmine, pay awards granted by British employers decreased in the three months to July. Median basic pay settlements were 4.5% higher than a year earlier, marking the smallest rise since April. This decline aligns with Bank of England forecasts for slowing wage growth.
Brightmine predicts that pay deals will continue to slow down heading into 2025. Employers have already adjusted pay awards to reflect the falling inflation environment. Further decreases in pay awards are expected as the year progresses.
Recent surveys by the Chartered Institute of Personnel and Development and the Bank of England indicate planned pay increases of 3% and 4.1%, respectively.
Official data reveals that British pay growth was at its slowest pace in nearly two years during the second quarter of 2024. Despite this, pay growth remains higher than the pace deemed compatible with the BoE's inflation target.
Following a recent interest rate cut by the Bank of England, investors are speculating about the possibility of another rate cut in September, as the central bank continues to monitor wage growth closely.
Analysis:
The article highlights a decrease in pay awards by British employers during the three months to July, signaling a slowdown in wage growth. This trend is in line with forecasts from the Bank of England. Employers are adjusting pay awards to reflect the current inflation environment, with further decreases expected in the future. Surveys indicate planned pay increases, but official data shows slow pay growth compared to previous years. The Bank of England's interest rate cut and monitoring of wage growth suggest potential future rate adjustments. Investors should pay attention to these developments as they can impact financial decisions and overall economic trends.