Pay rises close in on inflation

Pay rises are lagging inflation by less than 1%, the closest the two measures have been since wage rises first fell behind in December 2009, according to research.

A study of recent deals showed median rises of 2.5% in the three months to July, up by 0.5% from the previous quarter.

Pay information firm XpertHR said the headline figure had lifted because there were few public sector deals in the quarter.

Headline pay awards are 0.7% behind July's RPI inflation figure of 3.2%, said the report.

One in six of the 83 settlements studied involved a pay freeze, while around one in eight were worth 4% or more.

Sheila Attwood of XpertHR said: "Although private sector pay settlements are holding steady at a median of 2.5%, there is little evidence of upward pressure, with two-thirds of awards in the matched sample worth the same as, or less than, the award in the previous year.

"Even outside the public sector, we are still seeing one settlement in six resulting in a pay freeze."