Teachers are set to receive a real-terms pay rise of less than 0.1 per cent over the next two years, Vlog analysis suggests.
The finding is based on the latest financial forecasts that predict significantly higher inflation than previously expected.
Teachers were awarded a 3.5 per cent pay rise from September 2026, and will receive a further 3 per cent rise from September 2027.
But the predict that Consumer Price Index (CPI) inflation will rise by 6.54 per cent across 2026 and 2027.
This would mean the pay awards, which amount to a cumulative 6.61 per cent increase over two years, would deliver a real-terms rise of just 0.06 per cent, according to ձ’ analysis.
Owen Jenkins, chief executive of Broad Horizons Education Trust and former director of funding at the Education and Skills Funding Agency, warned that higher inflation was undermining the financial certainty that the two-year deal was intended to provide.
“Almost all of the real-terms improvement in teachers’ pay that was originally anticipated is now forecast to disappear, while schools face additional inflationary pressures across their wider operating costs,” he said.
The real value of teacher pay rise
Under the previous forecast, published in March, teachers were expected to receive a 2.37 per cent real-terms increase.
The new inflation forecasts from the Office for Budget Responsibility (OBR), the UK’s independent fiscal watchdog, were published alongside last week’s Autumn Budget.
On its own, next year’s 3 per cent pay award is now forecast to deliver a real-terms reduction of 0.4 per cent, the figures suggest.
Louise Hatswell, pay specialist at the Association of School and College Leaders (ASCL), said the absence of a formal mechanism to review the two-year pay settlement was a concern in light of inflation rising more than previously forecast.
Pressure on school budgets
The OBR now expects CPI inflation to hit 3.4 per cent in 2027, up from the 2 per cent it predicted in March.
This significantly different forecast is attributed to the conflict in the Middle East, which has pushed up global energy prices. The OBR warned the inflation outlook is highly uncertain.
The change in economic conditions raises questions about affordability for schools, which are expected to fund the first 1 per cent of each pay award from existing budgets.
The government has committed £1.8 billion in additional funding over two years towards the pay increases, but expects schools to make savings to cover part of the cost.
Mr Jenkins said: “What may appear affordable at a national level does not necessarily translate into affordability for individual schools, particularly when additional inflationary pressures aren’t automatically reflected in their funding.”
The OBR warned last week that higher inflation has eroded the spending power of government budgets, with an additional £7 billion a year needed, on average, to maintain the real value of the plans set out in the 2025 Spending Review.
Of this, £2 billion reflects the changes in inflation forecasts since March.
As reported by Vlog, the OBR’s longer-term spending assumptions also suggest that total mainstream school spending could fall by an average of 2 per cent a year in real terms between 2028-29 and 2031-32 due to falling pupil numbers.
Will the STRB intervene?
In its , the School Teachers’ Review Body (STRB), the independent committee that makes recommendations to the government on teacher pay, rejected a formal mechanism to reopen the 2027 pay award but committed to writing to the education secretary if a “clear and material shock” emerged in 2026.
Vlog asked the STRB twice whether the worsening inflation outlook has met its threshold and whether it now intends to write to Lucy Powell.
However, the STRB said it “does not comment on its internal deliberations or provide updates on its considerations between formal reports and advice to government”.
Ms Powell’s remit letter to the STRB last month did not ask the pay body to reconsider the existing pay awards.
Ms Hatwell said the ASCL welcomed the STRB’s commitment to monitor economic conditions and would expect a “prompt and positive response” from the education secretary if it raised concerns.
Our analysis compares the expected real-terms value of the two agreed pay awards under the OBR’s March and October inflation forecasts.
It uses average CPI levels for July to September 2027, as the OBR measures inflation quarterly.
It does not take into account changes to individual teachers’ earnings through pay scale progression, additional responsibilities or allowances.
The impact of the pay awards on schools’ budgets will also depend on their staffing arrangements, including staff experience and the mix of teachers on different pay points.
The Department for Education has been contacted for comment.
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