–UK May-July Median Pay Deal 2.0%, Down From 2.2% Q2: XpertHR
LONDON (MNI) – Median pay deals ticked down to 2% in the three
months through July from 2.2% in the second quarter, bringing them back
to a level bang-in-line with the Bank of England Monetary Policy
Committee’s inflation target, according to research from XpertHR.
The picture of UK pay deals for calendar year 2011 is now clear,
with deals coming in at or around 2% despite high headline inflation.
XpertHR notes that in January and April alone, the first months of the
calendar and fiscal year respectively, more than 60% of pay awards are
settled.
XpertHR revised up its Q2 median pay deal to 2.2% from the
originally reported 2.0%, but the median came back down for the 3 months
through July.
The more hawkish members of the Bank of England Monetary Policy
Committee have highlighted the risk of high headline inflation feeding
through into higher earnings, but this effect so far this year has
clearly been muted at best.
The latest consumer price data, for July, showed CPI up 4.4% on the
year and RPI up 5.0%. While the MPC’s target is 2% on the CPI measure
wage bargainers tend to focus on RPI.
More than eight in ten employers who used an inflation measure as a
guide to pay awards used RPI, rather than CPI, according to XpertHR
research.
The tough economic climate appears to be curtailing pay awards and
preventing employee pay growth even coming close to matching inflation.
XpertHR sees no notable pick up in pay growth in coming months.
“The fragile job market, combined with consumption and demand
continuing to be affected by factors including rising food and oil
prices, means that we expect no significant, if any, increase in median
pay awards for the rest of the summer,” XpertHR Pay and Benefits editor
Sheila Attwood said.
XpertHR was previously known as IRS.
–London newsroom: 0044-7862-7491 email: drobinson@marketnews.com
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