Settlements fall back to inflation level

The latest figures from LRD's Payline database show a three-monthly median increase of 3.2% to April - a slight fall on the revised median of 3.4% for the three months to March. The median across the entire length of the payround so far is also 3.2%, but measured by the number of workers covered it rises to 3.7% - indicating that settlements affecting large numbers of workers are achieving higher pay rises.

The private sector median for the past three months is 3.6%, higher than the 3.2% public sector figure. Manufacturing settlements (with a 3.5% median) are outperforming those in the service sector (3.3%).

Inflation

The Retail Prices Index (RPI) rose by 3.2% in the year to April - a rate of increase unchanged since January. The RPI excluding mortgage interest payments (RPIX) rose by 2.3% in the same period, slightly down on the 2.4% in the 12 months to March.

The average forecasts of inflation in the final quarter of 2005 are now 2.6% for the RPI and 2.2% for RPIX.

Earnings

The two average earnings measures - including and excluding bonuses - were the same (4.0%) for the year to March. The three-monthly average increase (including bonuses) is 4.6%.

While private sector earnings increased on average by 4.0%, the public sector rose by 4.2% - and service sector earnings growth (4.5%) was well above the level in manufacturing (3.4%).