Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Latest NewsEconomics, government & businessPay & benefitsPay settlements

Inflation surge could lead to unsustainable pay settlements

by Kat Baker 17 Feb 2010
by Kat Baker 17 Feb 2010

The surge in the cost of living “has come at the worst possible time” and could lead to unsustainable pay settlements, the CIPD has warned.

Figures released by the Office of National Statistics yesterday showed the Retail Prices Index (RPI) shot up to 3.7% in the year to January compared to 2.4% in the year to December, while the Consumer Prices Index (CPI) rose by 0.6% in December to 3.5% in the year to January.

Most employers focus on the CPI to set their pay awards, but the Chartered Institute of Personnel and Development (CIPD) warned eight in 10 employers also use the RPI as their key cost of living benchmark, so its sharp rise last month could lead to increased pay settlements.

John Philpott, chief economic adviser at the CIPD, said while employers could be tempted to increase wages in line with the RPI, both the CPI and RPI would “almost certainly” drop later in the year and a squeeze on pay was necessary now to limit future job cuts.

He said: “With the late winter and early spring still an important period for pay bargaining, the surge in RPI inflation has come at the worst possible time.

“There is a risk that higher inflation will trigger bigger wage rises than the UK’s ailing economy can currently afford, even though the rise in both CPI and RPI inflation is a temporary spike, that will almost certainly be followed by an equally sharp fall later in the year.

“While it may not be comforting news for already hard-pressed workers facing a rise in their cost of living, real wages will have to be squeezed if jobs are to be preserved and any further rise in unemployment minimised.”

The median basic pay award was 1.2% in the three months to 31 December 2009, a survey by IRS for XpertHR revealed.

Analysis of pay trends by IRS can be found on the XpertHR website.

Avatar
Kat Baker

previous post
IRP extends its range of services in 2010
next post
Outsell names Giunti Labs among its 30 companies to watch

You may also like

Something new to get stressed about: hello Premier...

5 Aug 2022

Economic outlook slows hiring despite skills shortfalls

5 Aug 2022

ESG for HR: Emma Burrows talks to Oven-Ready...

5 Aug 2022

How introverts can become brilliant leaders

5 Aug 2022

EU member states to make carer work-life balance...

5 Aug 2022

Office could be sanctuary for workers fearing winter...

4 Aug 2022

Inflation forecast to hit 13% in autumn says...

4 Aug 2022

Shell to pay workers a one-off 8% bonus

4 Aug 2022

Dyson fined £1.2m after machine fell on worker

4 Aug 2022

RPI inflation forecast to reach 18% says think...

3 Aug 2022
  • 6 reasons why work-based learning is better than traditional training PROMOTED | A recent Fortune/Deloitte survey found that 71% of CEOs are anticipating that this year’s biggest business disrupter...Read more
  • Strengthening Scotland’s public services through virtual recruiting PROMOTED | This website is Scotland's go-to place for job seekers looking to apply for roles in public services...Read more
  • What’s next for L&D? Enter Alchemist… PROMOTED | It’s time to turn off the tedious and get ready for interactive and immersive learning experiences...Read more
  • Simple mistakes are blighting the onboarding experience PROMOTED | The onboarding of new hires is a company’s best chance...Read more
  • Preventing Burnout: How can HR help key workers get the right help? PROMOTED | Workplace wellbeing may seem a distant memory...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2022

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2022 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+