Key facts
- Median pay rise awarded by major UK employers was 3.5% in February-April.
- This median pay rise is unchanged from the three months to March.
- The proportion of firms offering pay rises of 4% or more rose to 33% in April.
- Permanent job placements in the UK fell at the fastest pace since July 2025 in May.
- Firms increased hiring of temporary staff for flexibility as uncertainty persisted.
Pay settlements awarded by British employers held steady in the three months to April, with the median pay rise at 3.5%, according to a survey by Incomes Data Research (IDR). This figure remained unchanged from the previous period, despite an increase in the country's minimum wage.
The Bank of England is closely monitoring pay growth as it assesses inflation pressures within the economy. The IDR survey also indicated that the proportion of firms offering pay rises of 4% or more increased to 33% in April, up from 21% in March. This rise was attributed to larger pay increases in the engineering, energy, and water sectors.
April saw higher pay awards partly because the national minimum wage rose by 4.1% to £12.71 per hour for individuals aged 21 and over. However, pay awards in the private services sector saw a slight decrease, falling to 3.3% from 3.5% in March. Despite this, there were larger increases observed in retail and hospitality jobs that are paid closer to the minimum wage.
Separately, Britain's jobs market cooled rapidly in May, with employers putting the brakes on permanent hiring due to heightened cost pressures and uncertainty. The monthly Report on Jobs from KPMG and the Recruitment and Employment Confederation showed permanent job placements fell at the fastest pace since July 2025, marking the longest period of contraction since the survey began in 1997. Firms ramped up hiring of temporary staff as uncertainty persisted, while vacancies dropped at the sharpest pace since February.
The IDR survey's findings are based on 166 pay awards made between February 1 and April 30, covering more than 3.3 million workers. The REC and KPMG survey was based on responses from around 400 recruitment agencies between May 12 and May 22.