Pay
award levels are holding steady, easing fears that falling unemployment will
force up inflation, according to research.
The
CBI’s Pay Databank Survey shows service
firm settlements averaged 4.1 per cent in the three months to February 2001,
compared with 4.2 per cent in the three months to November 2000.
A
year ago, the average was 3.4 per cent.
Forty
four per cent of service companies cited the need to retain or recruit staff as
the main factor behind increased pay awards. This was followed by high cost of
living increases that were reported by 38 per cent of firms.
Sudhir
Junankar, associate director of economic analysis of CBI, said, “With headline
inflation falling, cost of living pay pressures are easing but labour market
pressures are rising only slightly. The overall picture on basic pay
settlements is one of encouraging stability.
“This
survey provides further evidence that concerns about a tightening labour market
leading to upward pressure on settlements have not been realised.”
Since
the last CBI Pay Databank Survey two months ago cost of living pressures have
reduced but labour market pressures have increased.
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