–Median Pay Deal Stable At 2.0%; Proportion Of Higher End Deals Rises

LONDON (MNI) – UK median pay deals remained stable in the three
months through July but there was an increasing proportion of higher
end pay deals, according to the latest Incomes Data Services report.

The Bank of England Monetary Policy Committee pays close attention
to pay data, with the risk of recent high inflation outturns being
relayed into higher pay deals. Business surveys and official data,
however, suggest that pay growth so far has been anaemic.

In an interview published by the Times this week MPC member Martin
Weale downplayed the importance of a pick up in inflation expectations,
saying it would be of concern if it fed through to wages.

“I wouldn’t be seriously alarmed (about inflation expectations)
unless there were evidence that wage growth had started to pick up,
because it seems rather unlikely that you can have something driven by
prices with nothing happening to wages,” Weale said.

The latest IDS data suggest there may be some upward creep in
wages, but it is at the margins.

The data, from IDSPay.co.uk, found continued stability in private
sector pay awards.

The median pay deal in the three months through July was 2.0%,
unchanged from the three months through June and consistent with levels
throughout this year.

At the upper end of the spectrum, however, IDS found around 30% of
pay deals were worth 3% or more, while at the bottom end, just 15% of
deals were pay freezes.

The median pay settlement in manufacturing was 2% and in services
2.2%.

“As we might expect in the aftermath of a serious recession, basic
pay increases remain modest. But the recovery in the business outlook
and higher inflation are combining to place a certain amount of upward
pressure on private sector awards,” Ken Mulkearn, Editor of IDS Pay
Report, said.

With the May to July period not one that contains significant
public sector pay deals, IDS’ latest survey was based almost entirely
on private setor deals and covered 48 pay settlements recorded, covering
370,033 employees.

–London Bureau; Tel: 44-20-7862 7492 or email:
ukeditorial@marketnews.com.

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