Pay rises edge higher

12 April 2012

Pay rises are edging up, with most recent deals worth at least 4%, according to a new report.

Settlements in the first three months of the year matched the 3.5% average in 2007, but higher awards are being made this month, said pay analysts Incomes Data Services (IDS).

A study of 30 deals so far this month shows that two out of three were worth 4% or more, mainly in utilities and chemicals firms.

More than half of settlements from April are part of long term deals, mostly linked to the rate of inflation.

Ken Mulkearn of IDS said: "The higher levels of increases we are seeing under new April deals in the private sector are based on continued high levels of inflation, and also on employers' ability to pay, especially in key sectors.

"RPI inflation has been above 4% for most of the period since the end of 2006, despite earlier predictions that it would fall, and this may underlie some of the strengthening pay pressures.

"And as ever, there's a substantial gap between pay rises in the public sector and those in the private sector."

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