UK pay awards stay hot, some signs of 2024 cool-down: XpertHR

LONDON (Reuters) – Pay awards from British employers remained at their highest sustained level in more than 30 years in the three months to the end of November but there were some signs they could cool slightly in 2024, human resources information provider XpertHR said on Wednesday.

In the public sector, median pay deals held steady at 6.5%, the same rate as in the three months to October and above the private sector median of 6%, which was also unchanged from the previous reading.

Overall, the median pay settlement across the economy stood at 6%, up from 4% a year earlier.

The Bank of England is worried that persistent wage growth, especially in the private sector, will fuel inflation in the years ahead and limit its ability to cut interest rates from their 15-year high of 5.25%.

“Employers have indicated that there may only be a small drop-off. Our prediction for the going rate of pay awards in 2024 sits at 5%,” Sheila Attwood, XpertHR senior content manager, said.

The XpertHR figures for the three months to November were based on only 26 pay deals affecting just under half a million employees. Many pay deals are settled in January, a key month for settlements data.

Official data last week showed a bigger-than-expected slowdown in average weekly earnings growth during the three months to October.

On Monday BoE Deputy Governor Ben Broadbent said officials will have to wait before they can be sure that wage growth – a key driver of inflation pressure – really is on a downward trend.

(Reporting by Andy Bruce; editing by David Milliken)