LONDON: Pay settlements awarded by British employers held at their lowest in two years in the three months to August, according to a survey that could reassure the Bank of England (BoE) as it considers whether to cut interest rates again.

Incomes Data Research (IDR) said yesterday that the median pay settlement awarded by major employers held at 4% for the second month in a row.

Median pay awards in the public sector stood at 4.5%, above those in the private sector which slowed to 4.1%.

“The differing outcomes in the private and public sectors reflect the cycle of pay between the two, with the public sector currently in the ‘catching-up’ phase, after a lengthy period in which pay awards lagged behind those in the private sector,” Zoe Woolacott, senior researcher at IDR, said.

Finance minister Rachel Reeves announced above-inflation pay increases worth £9.4bil (US$12.53bil) for public sector workers including teachers and doctors shortly after the Labour Party won a parliamentary election in July.

Official figures last month showed British private sector wage growth cooled to a more than two-year low of 4.9% in the three months to July.

The BoE is monitoring wage growth, and expects private-sector pay to slow to 3% in late 2025.

- Reuters