The value of wage deals negotiated by UK employers rose slightly in the three months to May. A survey released Wednesday showed that wage growth — a key driver of inflationary pressures — is cooling.
Average basic salary was 4.6% higher in the three months to May than a year earlier. It was 4.5% in April, revised up from 4.9%, according to labor data provider Brightmine.
The Bank of England is closely watching wages data ahead of its interest rate decision in June.
Before cutting interest rates, most BoE policymakers want to see signs of annual wage growth returning to the 3-4% range from the recent 6%.
“We’re seeing less than 5% pay settlement at the start of the year. We expect them to remain at this level through the end of the year,” said Sheila Atwood, senior content manager at Brightmine.
“Employers have responded to lower inflation by cutting severance pay compared to last year, but keeping wages up comfortably above inflation while workers feel life pressures.”
A BoE survey in April found employers expect wages to rise 4.6% next year.
The Brightmine survey is based on 132 wage settlements between March 1 and May 30, affecting more than 533,579 employees.
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