Public sector awards push pay increases up

Pay awards increased to nearly 3 per cent in the three months to May,
research by Industrial Relations Services reveals.

Settlements dropped to 2.5 per cent just before Christmas but have since
bounced back, giving a revised figure for April of 2.8 per cent. The spread of
settlements has also increased and narrowed, with half of all deals to May
worth between 2.2 per cent and 3.4 per cent.

IRS attributes the overall increase to relatively generous public sector
awards. Private sector deals as a whole remain fixed on 2.5 per cent, with
manufacturing deals falling behind those for the service sector.

Mark Crail, managing editor of IRS Employment Review, said: "Despite
the increase in the headline rate, there really is little indication here that
the private sector is overcoming the weak economic conditions of the past six
to nine months.

"Manufacturers in particular clearly have little room to manoeuvre.

"Looking back to the same period last year, two-thirds of employers
were then settling at a higher level. A matched sample of 107 settlements shows
that 64 per cent have agreed a lower figure this year, with just 19 per cent
awarding a higher increase.

"Any increase over the next few months is likely to indicate a rise in
inflation rather than a recovery in employer confidence."

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