Since the pandemic, average regular pay growth has been slightly stronger in the private sector (5.1%) compared to the public sector (4.6%), although the gap has narrowed more recently, indicating a convergence in wage pressures across sectors. This shift stems from ‘catch-up’ pay awards in the public sector, which were introduced to help wages recover after they trailed behind the private sector for several years (6).

For dental practices, this environment remains competitive, with inflationary pressures continuing to stabilise, and pay growth broadly in line with inflation, supporting a relatively resilient outlook for consumer demand in the dental market.

Monetary policy and economic activity

In February 2026, the Bank of England voted to maintain the bank rate at 3.75%. This decision reflected a balanced economic outlook, with diminished risks of sustained inflation increasingly being weighed against the cooling effect on prices caused by weakened demand, and a gradual increase in labour market slack (the availability of workers) (7). As these inflationary pressures subside, financing conditions have eased, with borrowing costs now at their lowest level since February 2023. This provides renewed support for investment and cash flow within the dental sector.

Read more in the practice investment and acquisitions section.

The UK economy demonstrated encouraging momentum in early 2026, with real gross domestic product (GDP) growing by a faster-than-expected 0.6% in the first quarter. This followed a 0.5% growth in the three months to February 2026, the strongest three-month expansion since March 2025. This was reinforced by an upward revision to January’s figures, indicating a stronger start to the year than previously estimated (8).

Although global risks and geopolitical uncertainty remain, stronger-than-expected domestic performance, and upward revisions to UK growth forecasts suggest the UK is entering 2026 on firmer footing. The International Monetary Fund has revised up its 2026 UK growth forecast from 0.8% to 1% (9), supporting the view that economic conditions remain relatively well placed to navigate these wider global challenges.

Notes

CPIH includes housing costs and is the Office for National Statistics’ preferred measure of inflation.
Consumer price inflation, UK | Office for National Statistics
CPI annual rate 06.1: MEDICAL PRODUCTS APPLIANCES AND EQUIPMENT 2015=100 | Office for National Statistics
CPI annual rate 04.5: ELECTRICITY, GAS AND OTHER FUELS 2015=100 | Office for National Statistics
Average weekly earnings | Office for National Statistics
Analysis of average weekly earnings | Incomes Data Research (IDR)
Monetary Policy Report - February 2026 | Bank of England
GDP monthly estimate | Office for National Statistics
United Kingdom: Staff Concluding Statement of the 2026 Article IV Mission | International Monetary Fund

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