LONDON (MNI) – Median pay settlements consolidated around the
3.0% level in the three months to the end of February, according to pay
experts IDSPay.co.uk.
The study shows a median pay settlement at 3% for the
three months to the end of February, unchanged from the previous
3-month rolling period. In the three months to the end of December pay
deals showed a median of 2.5%.
IDSPay.co.uk said that falling inflation may have played a role in
reducing the pressure on employers to pay higher awards, but it says
that cost control is likely to have been a factor as well.
Over a fifth of awards in the latest analysis are at 4% or above.
The median settlement for the three months to February is higher this
year than it was a year ago when it stood at 2.5%.
This study said that the year-on-year rise was in part due to
higher settlements in industries where the outlook has improved – cars
and heavy engineering.
IDSPay.co.uk said that the proportion of pay freezes is slightly
lower than it was in 2011, with 7% of settlements resulting in pay
freezes in the three months to February 2012 compared to 8% this time
last year.
This slight uptick in pay deals may not be welcome to the Bank
of England’s Monetary Policy Committee at a time when it is looking for
headline inflation to continue to fall back towards its 2% target by the
end of this year.
The minutes for the March meeting of the Monetary Policy Committee
revealed some members citing wage drift as one upside inflation risk:
As the BOE minutes put it:
“There had been some signs of an upward drift in pay settlements
which, alongside continued uncertainty about the outlook for
productivity, could indicate some upward pressure on unit labour costs
in the future”.
–London Bureau; Tel: 44-20-7862 7491 or email:
ukeditorial@marketnews.com.
[TOPICS: MT$$$$,MABDS$,M$$BE$]
