LONDON (MNI) – Due to the public sector pay freeze, UK workers’
median pay deal fell to zero in the three months through April, the
weakest outturn since July 2009, according to the latest survey from
XpertHR.
The median pay deal based on the number of pay settlements fell to
2.0% in the three months through April from 2.6% in the first quarter.
Weighted by the number of employees, however, it hit zero, down from
1.8% in the first quarter, with the large public sector deals dominating
the picture.
The figures show a further softening in pay growth which is likely
to feed through to the official Average Weekly Earnings data for April
which will be published next month. Regular pay growth remained at just
1.6% in the three months to March and could head lower given the
weakness in the settlements numbers.
When XpertHR last recorded employee weighted pay deals at zero,
Average Weekly Earnings in the following months in late 2009 declined to
just over 1%.
Bank of England Governor Mervyn King said at the May Inflation
Report press conference that the weakness has been “really quite
surprising, but welcome in terms of containing domestic cost inflation.”
XpertHR’s Pay and Benefits editor Sheila Attwood said the plunge to
zero in the employee weighted median was primarily due to some 1.6
million local government employees receiving no pay increase.
April is the busiest month for pay settlements and, looking at the
latest data the cruelest one, with around four in 10 pay awards given
this month. It’s the first month in the UK fiscal year and the key one
for public sector pay deals.
Of 29 public sector pay reviews, which include the local government
workers, the prison services, the armed forces and 202,808 NHS doctors,
55.2% of them saw a pay freeze.
Lower paid national health workers, that is those earning up to
Stg21,000 a year, did, however, get a Stg250 pay increase.
The private sector, on the other hand, saw figures remain the same
in the three months to the end of April. The data show median private
sector pay deals at 2.5%, up 0.2% from last year’s 2.3%. At the higher
end of private sector pay, pay awards extended to 3%.
The current pattern of pay awards in both the private and public
sector is set to stay the same in the near future.
Attwood told MNI she expected the whole economy, three monthly
median pay deal based on the number of deals to hold steady at 2% in May
and June and, maybe, to nudge up to 2.1% or 2.2% later in the year.
This compares with the long run, pre-financial crisis trend rate of
between 3% and 3.5% in the XpertHR series.
If pay deals do remain this weak “the squeeze on real incomes will
continue for some time to come,” Attwood says.
She says she doesn’t expect a substantial rise in pay until “2015
at the earliest, and based on what we know about government policy now.”
The XpertHR survey was based on 175 pay awards effective between
Feb 1 and April 30, covering almost four million employees.
Sarah Mewes is a reporter for Need to Know News.
-London newsroom: 0044-7862-7491 email: drobinson@marketnews.com
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