Rise in inflation increases unions demand for higher pay claims

Pay talks intensified across the country last week as both official measures acknowledged a rise in inflation.

With widespread negotiations taking place in the build up to the next pay round in April, the Office for National Statistics revealed that the Consumer Price Index (CPI) had risen from 2.1% in December to 2.2% in January, while the Retail Price Index (RPI) had risen from 4% to 4.1% over the same period.

The Public and Commercial Services union (PCS) immediately said it would increase its demands for higher civil service pay. It wants deals at least of the same magnitude as the RPI, which includes a reflection of mortgage payment rises among other cost-of-living factors left out of CPI calculations. A spokesman told Personnel Today: “The change in the RPI will be factored in to our negotiations, and adds to our concerns over three-year pay deals.”

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John Philpott, chief economist at the Chartered Institute of Personnel and Development, said that staff would be looking to recoup the drop in living standards caused by higher bills. But manufacturing employers’ body the EEF insisted that the average level of pay settlements was unchanged between December and January at 3.1%.

Deputy director of employment policy David Yeandle said: “These figures would appear to allay fears that the increased cost of living would put upward pressure on pay demands.”