Service sector pay falls

Pay awards in service sector firms have fallen, according to the latest pay databank survey from the CBI employers' organisation.

They averaged 3.7% in the three months to September, compared with 4.1% in the three months to June and 3.9% the same time a year ago. Official average earnings figures support that trend (see page 6). Manufacturing pay awards edged up slightly, averaging 2.9% in the three months to September compared with 2.7% in the three months to June and 3.1% the same time a year ago. But CBI chief economic adviser Ian McCafferty said: "Manufacturing pay awards remain low and are being held back by pressure on prices and the global slowdown."

He added that "the fall back in service sector pay indicates that the slowdown is spreading to other areas. This data suggests that there is little pressure on inflation and should reassure the Bank of England."