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Latest NewsInflationPay & benefitsPay settlements

Private-sector pay awards edge closer to inflation

by Laura Chamberlain 27 Sep 2012
by Laura Chamberlain 27 Sep 2012

The gap between private-sector pay settlements and headline inflation is narrowing, according to research from XpertHR.

While the median basic pay increase remained unchanged in the three months to the end of August at 2.5%, retail prices index inflation fell to 2.9%, leaving pay awards tracking just 0.4 percentage points behind this inflation measure.

The XpertHR pay trends report warns, however, that for the gap to close further, inflation will have to continue falling as pay rises in the private sector have remained firmly between 2% and 2.6% for the past year and show no signs of increasing.

Sheila Attwood, XpertHR pay and benefits editor, said: “The median pay settlement has remained remarkably stable during a period of economic uncertainty.

“Analysis of the range of pay deals reveals that pay freezes are still evident, and with inflation falling, the number of pay deals worth more than inflation is rising. But, at present, we see no evidence of a shift in the median pay settlement over the coming months.”

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Across all employers, the XpertHR research found that the median pay award stood at 2.4%. This was lower than the private-sector figure due to the prevalence of pay freezes in the public sector.

View full details of the September pay trends report on XpertHR.

Laura Chamberlain

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