UK pay settlements dip to 3%, offering relief to Bank of England

LONDON, May 20 (Reuters) - British employers lowered their ​pay ⁠deals in the three ​months to April back to levels last seen in mid-2025, according to figures ​released ‌on Wednesday by human resources data firm Brightmine which add to ⁠signs of a slowdown in the labour ⁠market.

The Bank of England ​is watching pay awards with a focus on the busy month of April as it gauges inflation pressures in Britain's economy, which ​investors ‌view as very exposed to higher energy prices caused by the war in Iran.

Official data published on Tuesday showed average weekly earnings, excluding bonuses, rose by 3.4% in the ​first three months of 2026 compared with the same period of ‌2025, the weakest annual increase since 2020.

* Brightmine said the median pay deal was 3.0% ‌in the three months to April, down from a revised 3.4% in the first three months of 2026 and following seven ​rolling quarters above the 3.0% level

* The drop in the median for the ‌three-month period was driven mostly by settlements in April - a month when many pay deals are reached

* "The return to a 3% ⁠median ⁠pay award suggests that many organisations are settling ‌into a more sustainable pay position after several years of elevated settlements," Sheila ​Attwood, Brightmine's senior ​content manager of data and HR ‌insights, said.

* Brightmine based its reading on 169 pay deals introduced between February 1 and April 30, representing settlements for 2.7 million employees. (Writing by William Schomberg Editing by David Milliken)