UK pay awards rise in first quarter but slow in April
UK pay deals rose to 3.5% in the first quarter of 2026. Early data for April suggests a drop to 3% as employers grow cautious amid higher energy costs.
British employers in the United Kingdom increased pay awards during the first quarter of 2026, although early indications for April point toward a potential slowdown. According to a report by human resources data specialist Brightmine, the median pay settlement rose to 3.5% in the three months ending in March, up from 3.3% in the previous two rolling quarters. This data is based on an analysis of 111 pay deals covering approximately 373,000 employees.
The Bank of England is closely monitoring these figures as it evaluates inflationary pressures. While official statistics recently showed that average weekly earnings cooled less than expected through February, other indicators such as job vacancies and payroll data suggest the labor market began to soften in March.
For April, a critical month that typically sees nearly half of all annual wage settlements, initial analysis suggests a median pay award of 3%. This shift reflects a cautious stance among employers facing an uncertain economic outlook and rising costs, including adjustments to the minimum wage. Sheila Attwood, senior content manager at Brightmine, noted that there is currently little evidence of building upward pressure on wages.
While increases remain broadly in line with expectations, there is little evidence of upward pressure building.
The Bank of England remains vigilant as it assesses whether the economy is more vulnerable to external shocks, such as energy price volatility, compared to its international counterparts.
