UK salaries are projected to increase by 1.3% in real terms in 2024, higher than many of the country’s global peers as its inflation rate declines, according to ECA International's annual Salary Trends Report. 

Inflation is expected to be 3.7% next year for the UK, its lowest rate since 2021. 

When inflation was higher, UK businesses were unable to “offer their employees pay awards to match,” said Oliver Browne, remuneration and policy surveys manager at ECA International, in a press release.   

At the same time, UK businesses anticipate a nominal pay increase of 5%. For the average annual salary of £34,372, this amounts to approximately £447, according to the report.

Globally, the UK ranked 28th for salary increases in real terms out of 68 nations the survey included, and is forecast to outperform the global average rise of 1%. Within Europe, it is ranked 7th, higher than the European average increase of 0.9%.

Despite gains, Europe is expected to lag behind other parts of the world in terms of real-term pay increases. The Asia-Pacific region's forecasted average increase is 2.2%. 

In 2023, UK salaries fell by 1.3%.

“UK workers have had a difficult few years,” Browne said. “Now that inflation is finally expected to fall below 4%, employees in the UK should be able to look forward to their first real terms pay increase since 2020.”

 -Henry Liu, Staffing Industry Analysts