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Average annual pay awards offered by British employers rose in the three months to May, after an increase in the minimum wage boosted pay significantly for some lower-paid workers, a survey showed on Wednesday.
Incomes Data Research said the median pay settlement awarded by major British employers had increased to 3.4% in the three months to May, up from 3.2% in the three months to the end of April.
Median pay awards for private-sector workers increased to 3.5% in the same period, while public-sector pay awards averaged 3.6%.
The proportion of private sector employers offering pay settlements of more than 6% jumped to 19% from April’s 12%, reflecting higher increases in the services sector.
The National Living Wage rose by 9.7% at the start of April to 10.42 pounds ($14.34) an hour.
“The National Living Wage has a less direct impact in manufacturing, compared to private services,” Zoe Woolacott, a senior researcher at IDR, said.
“However, manufacturing employers still face pressures to offer competitive rates of pay in order to recruit and retain staff.”
The news is could to be a concern for the Bank of England, which is keeping a close watch on inflation pressures in the economy.
The BoE, which held interest rates in June, has forecast a slowdown in pay growth this year and expects inflation to peak at 3.7% in September and remain just under 3.5% for the remainder of 2025.
Official figures showed British pay growth slowed sharply in the three months to April to 5.2% while inflation cooled in May.
IDR’s survey, covering pay deals for 3.3 million employees, was based on 178 awards between March 1 and May 31.
($1 = 0.7266 pounds)
(Reporting by Suban Abdulla, editing by Andy Bruce)
