UK pay growth shows slowest median salary increase since 2021

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UK median salary growth slows

Highlights

UK median full-time annual pre-tax salary rises to £40,911 in the year to April, with growth below last year's 4.6% increase—the weakest since 2021.
ONS data shows weekly earnings in April up 4.9% year-on-year, as full-time weekly pay climbs 5.8% and part-time pay rises 2.9% due to fewer hours worked.
Gender pay gap for full-time workers narrows to 6.8% from 7.2%, while managers' weekly earnings grow 6.7% and factory workers' by 4.1%.

Official survey points to mixed wage signals

As reported by Reuters, citing the Office for National Statistics' Annual Survey of Hours and Earnings, the median full-time annual pre-tax salary reaches £40,911 in the 12 months to April, up from a year earlier but below the 4.6% rise recorded in the previous period.

Thursday's figures also show weekly earnings in April are 4.9% higher than a year earlier, above the 4.7% increase previously reported in the ONS's smaller monthly survey. That suggests pay growth may have accelerated during the year even as the headline annual salary measure posts its weakest increase since the COVID-19 pandemic period in 2021.

For full-time employees, weekly pay rises 5.8% year on year in April, while weekly part-time pay increases 2.9%. The slower gain for part-time workers reflects a fall in weekly hours worked.

Bank of England focus and labour market impact

The data matters for the Bank of England, which is assessing the strength of inflation pressures triggered by the U.S.-Iran war. Policymakers typically view pay growth much above 3.0% as making it difficult to return inflation to the central bank's 2% target.

Within the labour market, full-time weekly earnings rise fastest for managers, up 6.7%, and slowest for factory workers, up 4.1%. The gender pay gap for full-time workers narrows to 6.8% from 7.2%, although the measure does not adjust for differences in occupation, experience or qualifications.

The ONS says the figures are based on a sample of 197,000 employee records, the largest since the survey began. The numbers also arrive before the government is expected next week to set the 2027 minimum wage rate, after the hourly minimum wage rises 4.1% in April to £12.71.

Our earlier coverage of Bank of England Deputy Governor Sarah Breeden’s remarks at the IMF meetings highlighted that the UK economy has absorbed the energy price shock better than initially feared, helped by fiscal support and central-bank actions to steady markets. The piece also stressed that inflation and market volatility remain key risks, keeping policymakers focused on monitoring conditions and adapting policy to safeguard financial stability.

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