"Bonus blip" masks lack of change in settlements

The latest figures on average earnings show that the January "blip" caused by City bonuses was even more pronounced than was originally reported. The Office for National Statistics has now revised the January figure up to 7.3% (including bonuses), while the February figure has dropped back to a relatively modest 4.0%. In fact, considered alone, private-sector services had an annual increase to January of 10%.

Meanwhile, settlement levels (as monitored by the LRD PayLine database) show little change - the three-monthly median (midpoint) remains at 3.0%, and the only significant variation is the public sector on 3.5% compared with the private-sector figure of 3.0%.

The only other variation in the settlement figures is the annual figure weighted by workers covered, which has risen to 4.0% for the year to March. This reflects higher settlements among larger bargaining groups.

Inflation

The latest figures on inflation show a widening gap between the Retail Prices Index (RPI) and the government's preferred measure, the Consumer Prices Index (CPI). While the RPI has risen to 2.6% for the year to March, the CPI has fallen to 1.1%. The RPI excluding mortgage-interest payments has also fallen, to 2.1%.