Pay rises creep up but still trail RPI

The median for pay increases in the three months to October rose to 2.5% from the 2.3% recorded for the three months to September, according to figures from the Labour Research Department (LRD) Payline database of collective agreements.

However, with inflation as measured by the Retail Prices Index (RPI) still running at 4.5% for the year to October, pay increases were clearly still lagging well behind price rises.

The Payline figures show some variation by sector, with the private sector having a median increase of 2.3% while the public sector median was 2.6%. In manufacturing, settlements averaged 2.3%, but the median increase in services was 2.6%. All these figures are based on the increase in lowest basic pay in each agreement.

The latest government statistics on average earnings show that average weekly earnings including bonuses rose by 2.2% in the year to September. The average varied by sector, with pay up by 2.3% in the public sector but just 1.9% in the private sector and by 3.6% in manufacturing but only 2.1% in services. The figures excluding bonuses varied only slightly from those including bonuses.

The other measures of inflation apart from the RPI were little changed: RPIX (which excludes mortgage interest payments) was unchanged at 4.6% for the year to October, while the Consumer Prices Index (CPI), the government’s preferred measure, went up to 3.2% for the year to October from the 3.1% recorded the previous month.