LONDON (MNI) – The slightly higher trend in UK private sector pay
settlements seen through December has been maintained in the three
months through January, pay experts XpertHR report Friday.
The median pay rise in the three months to the end of January 2012
stands at 2.5%, up from 2.3% in the same period a year ago. The 2.5%
median also applies to January alone and XpertHR’s forward looking
survey shows employers expect pay deals to come in at this level through
the next 12 months.
January is a key month for private sector pay deals, and the
XpertHR survey is an early take on what is going on. Sheila Attwood.
XpertHR’s Pay and Benefits editor, said it was only based on between a
quarter and a third of all the pay deals which are likely to be included
in its final January survey.
She told Market News that while private sector pay awards were
expected to hold around 2.5% this year, up from the 2.0% level expected
at the start of 2011, public sector and not-for-profit pay deals, out
largely in April, would weigh on overall pay growth.
A public sector pay freeze is in place and the early reports she
has received show not-for-profit pay deals will be low.
XpertHR said that almost half the awards (46%) were pitched at 3%
or higher and that the most common forecast was also 3%.
Overall 41% of pay awards are higher than the same group of
employees received a year ago, 35% are the same and 24% are lower.
Pay awards in the manufacturing sector – at a median 3% – continue
to outstrip those in services, which are running at 2.5%.
While pay awards are still running below inflation – headline CPI
was 3.6% in January and RPI 3.9%, the gap between inflation and pay is
now at its narrowest since the end of 2009.
Still, awards are still clearly below pre-recession levels.
Earlier today, Bank of England MPC Member David Miles noted that
pay deals remain ‘pretty subdued’ and that this factor would help
maintain the downward trajectory of UK inflation. He also expressed the
hope that falling inflation and the boost that this would give to real
disposable household income would boost consumer spending dynamics.
Attwood said “The new bargaining round has got off to an
encouraging start with pay rises showing their highest levels for three
years.”
“Employees are also benefitting from falling inflation, bringing
the chance of pay awards matching inflation even closer.”
–London newsroom: 0044-7862-7491 email: dthomas@marketnews.com
drobinson@marketnews.com
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