UK pay deals stick at 3%

UK pay deals seem to be stabilising as the median pay increase (the midpoint in the range) remains unchanged at 3% in the three months to the end of July 2005, according to research from pay analyst IRS.

However, while the median pay increase remains unchanged, a more in-depth look at UK pay figures reveals a more diverse range of pay increases being awarded, said IRS.

The number of pay deals at the higher end of the pay range has fallen. In the three months to 31 July 2005, 60% of basic pay awards were worth 3% or more, down from 69% in the three months to June 2005. The proportion of settlements paying increases of 3.5% or above has also seen a small fall from 22.5% to 19%.

IRS reveals that UK pay deals are no longer bunching at the median in the way that they have during the past few months. The lower quartile measure has fallen to 2.5%, while the upper quartile rate remains steady at 3.3%.

Other key findings include:

  • The majority of employees still received a higher pay increase in their latest review than they received a year ago

  • While the median basic pay increase in both public and private sectors remains steady at 3% for the year to July 2005, both the lower and upper quartile measures for the private sector dipped, in the three months to July 2005

  • Pay awards in the manufacturing and services sectors also remain unchanged at 3% in the three months to July 2005.

IRS pay and benefits editor, Sheila Attwood, said: “Our latest figures indicate that the basic pay settlement level is firmly set at 3% and we see no signs of any movement from this level over the next few months.

“However, with claimant count unemployment edging up for the sixth consecutive month, there is no evidence to suggest an upturn in wage pressure in the near future.”

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