Workplace Report (February 2025)

Real pay on the rise in UK and Europe

Pay deals reported to Payline were 4% on average in the three months to December 2024. This, in combination with a slight fall in inflation in December, means that UK pay after inflation is rising and represents real-pay growth.

The ONS points to UK pay after inflation rising at its fastest rate for more than three years. In real terms (adjusted for inflation by ONS using the Consumer Prices Index including housing costs), regular pay growth was 2.5%

Our main feature 'The golden age of logistics, but what about pay?' shows that some are seeing the benefits of growth in their pay. For example drivers of large goods vehicles are typically the highest-paid group, and their pay is about 45% higher than other categories of delivery drivers. However, warehouse operatives, for example, earn less than those in manufacturing.

Our second feature shows how the combination of hard-won pay rises in the context of falling inflation, is creating real-pay growth across Europe. Again, there are variations, with the largest increases in Central and Eastern Europe.

These are positive developments but with 'sticky' inflation and interest rates still high, the pressure from employers and government to restrict pay growth will increase during the course of 2025.


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