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Pay increases still below inflation rate

Published 05/05/2011

Median pay rises have remained at 2.5% in recent months, well below the rate of inflation, new figures have revealed. A study by pay analysts, Incomes Data Services (IDS), showed almost two out of three deals in the quarter to March were between 2% and 3%, compared with a current RPI inflation rate of 5.3%.

Pay awards continued to be recorded at higher levels in the private services sector than in the rest of the economy, at 2.9%, compared with 2.5% for the manufacturing and production sectors.

The study of almost 100 settlements covering just under 400,000 employees showed that median pay settlements have been at 2.5% for each of the last three rolling three-month periods, suggesting a balance between upward and downward pressures on pay.

IDS said that, alongside high inflation, the recovering profitability of firms also provided an upward pressure on pay settlements.

Ken Mulkearn, of IDS, said: "Our pay settlement figures show overall stability, with some evidence of modest upward pressures coming through from the initial data on April awards."

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