New research from Xcede’s 2026 UK Salary Guide highlights a strong surge in demand for AI, data, and senior technology professionals, with salary growth across several key roles despite a cautious hiring environment.
The report reveals that the UK technology labour market entered 2026 with mixed signals. While economic pressures and hiring caution remain, demand for specialised talent, particularly in artificial intelligence, machine learning, and data engineering has accelerated. As a result, many roles across the technology sector recorded salary increases during 2025, with the strongest growth observed in mid-level and specialist positions.
According to the guide, permanent salaries in several technology disciplines increased between 8% and 20%, particularly in data-related roles such as data engineering, analytics engineering and machine learning engineering. Senior data and AI professionals are also commanding higher salaries, with leadership roles in AI and research science reaching up to £181,000 at head-of level.
Matthew Jones, Sales Director said “The start of 2026 saw many predictions of a major downturn in the UK labour market. In reality, the technology sectors we operate in experienced a more nuanced picture, with confidence building throughout 2025, particularly in data, AI and cyber security roles.”
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Despite rising pay, entry-level hiring has slowed across the sector. Industry data cited in the report indicates that the number of computer science graduates has reached record levels, while entry-level software engineering hiring rates have declined significantly, creating a highly competitive environment for junior candidates.
Matthew Jones, Sales Director at Xcede, said the technology hiring market has proven more resilient than many forecasts suggested. “The start of 2026 saw many predictions of a major downturn in the UK labour market. In reality, the technology sectors we operate in experienced a more nuanced picture, with confidence building throughout 2025, particularly in data, AI and cyber security roles.”
The report also identifies a shift in how companies are building teams. Many organisations are prioritising leaner, high-impact teams, seeking professionals who combine deep technical expertise with broader strategic and commercial understanding.
AI skills have emerged as a defining factor in hiring decisions. The guide highlights that job postings requiring AI literacy have increased by approximately 70% year-on-year, demonstrating how quickly artificial intelligence capabilities are becoming essential across technology and business roles.
In software engineering, salary growth remained more moderate, with most roles rising between 5% and 10%, particularly in languages such as Golang, Python and backend JavaScript. Meanwhile, leadership salaries in engineering and architecture roles remained relatively stable, reflecting ongoing budget discipline among employers.
Cyber security continues to be another area of steady investment. Salaries for core security roles including cloud security, identity and access management and DevSecOps have remained stable but strong, reflecting sustained demand for experienced professionals in a rapidly evolving threat landscape.
Looking ahead, the report suggests that the technology job market is approaching a turning point. As AI adoption accelerates, organisations are expected to focus on building stronger data foundations, improving governance frameworks and hiring leaders who can translate technical capabilities into commercial outcomes.
Luke Adams, Director of Executive Search at Xcede, said the evolving role of AI is also reshaping leadership requirements. “Boards are increasingly looking for leaders who combine technical credibility with strong commercial judgement. Data and AI expertise is moving from specialist capability to a central part of executive leadership.”
While uncertainty remains around the long-term trajectory of AI-driven hiring, the guide concludes that demand for highly skilled technology professionals is likely to remain strong throughout 2026, particularly for those with cross-disciplinary expertise and experience delivering measurable business impact.
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