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Gloomy outlook for bigger pay rises

Low pay awards are here to stay, with increases for the rest of the year set to average below-inflation 2%, according to a new report.

Median increases remained at 2% in recent months, found a study of more than 50 settlements by pay specialist XpertHR.

Settlements in the public sector are focused on the Government's 1% policy, but in private firms increases have ranged from a 3.5% increase to a 10% cut, said the report.

Pay increases in manufacturing firms averaged 2.6% in recent months compared with 2% in the services sector and current RPI inflation of 3.1%.

Sheila Attwood, of XpertHR, said: "The number of employers awarding pay rises that match or exceed inflation remains low, with the majority of pay awards falling short of the increase in prices.

"For employees there is little prospect of higher pay rises as our research suggests that 2% will remain the benchmark pay award for the remainder of the year."

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