Further divergence in inflation measures

The latest inflation figures show a further divergence between the government's new preferred measure, the Consumer Prices Index (CPI), and the Retail Prices Index (RPI). The CPI remained unchanged at 1.3% for the year to December 2003, but the RPI rose to 2.8% for the year. The other measure, RPIX, which excludes mortgage interest payments, also rose to 2.6% for the year to December 2003. Negotiators will want to ensure that agreements remain pegged to the RPI rather than the Treasury's preferred measure.

Pay

The latest figures from the LRD PayLine database show a three monthly median to December of 3.2% with the median for the payround at 3.1%. Manufacturing settlements continue to run ahead of services at 3.5% for the three months compared with 3.1%. The latest figures from employers' organisation CBI are broadly similar, with an average of 3.2% for manufacturing settlements in the three months to November. Industrial Relations Services and Incomes Data Services report median increases of 3.0% for the latest three months.

Average earnings

Average earnings rose by 3.2% in the year to November, and again manufacturing ran ahead of services with increases averaging 3.5% compared with 3.1%.