June 24 (Reuters) - British employers expect to scale back pay increases markedly next year, according to a survey on Wednesday from human resources data firm Brightmine that added to signs of a cooling labour market.
About 42% of employers surveyed said they expected pay awards in 2027 to average between 2% and 3%, with the same proportion expecting deals between 3 and 4%.
Brightmine said this marked a step change from recent years where 3 to 4% was the norm.
While the Bank of England is likely to
welcome the readings given worries over the persistence of inflation, the findings underline concerns about the outlook for household demand.
Consumer morale is running low ahead of a change in prime minister, with the Labour Party's Andy Burnham currently the only candidate to take over from Keir Starmer.
Brightmine said its median pay deal for the three months to the end of May - based on actual awards - was 3.2%, unchanged from the three months to April.
"With inflation still above the Bank of England's 2% target and close to the current median pay award, employers may come under renewed pressure to go further than they are currently planning to support employee living standards," said Sheila Attwood, senior content manager of data and HR insights at Brightmine.
Its survey was based on 251 pay awards struck between March 1 and May 31, covering settlements for around 3.2 million employees.
(Reporting by Andy Bruce; editing by Suban Abdulla)
