UK Pay Settlements Stuck at 3% Median Ahead of BoE Decision

UK employers' pay settlements have plateaued at a median of 3% through August, according to data from Brightmine, an HR firm. This cooling trend is seen as a positive sign for the Bank of England ahead of its November decision on interest rates.

The median UK pay award was revised down to 3.0% in the three months to July and stayed at 3.0% in the three months to August, based on 45 pay awards covering over 755,000 employees. Brightmine also reports that employers expect a 3% median award for the year ahead.

This trend is significant because pay deals are a major input into services inflation, where labor costs play a key role. If wage-setting stabilizes at a predictable rate, it can ease pressure on firms' costs and give policymakers more room to keep interest rates steady.