Wage rises | Employers show restraint as pay awards stagnate despite rise in GDP

Median basic pay awards have stood at 3% for the eighth consecutive rolling quarter, with the majority of pay awards lower than the 2024 deal for the same employee group, new figures reveal.

The findings from Brightmine, the HR data and insights provider, come as the UK’s period of economic uncertainty continues, with the Bank of England reducing interest rates to 4%. Inflation remains well above the 2% target, with CPI at 3.6% and RPI at 4.4% (June 2025), the highest in over a year.  

While the latest GDP figures show modest growth of 0.3%, organisations continue to face rising wage pressures and higher employer National Insurance Contributions introduced earlier this year.  

Sheila Attwood, HR Insights and Data Lead at Brightmine, comments: “GDP may have risen, but the likelihood is that it won’t drive growth in pay awards. While this improvement is encouraging, employers are continuing to be cautious when it comes to pay awards, with four in five UK employees having received smaller pay awards in 2025 compared to last year. With ongoing uncertainty in the economy, it is likely that the current pattern of pay awards will continue.”