Take-home pay in private sector slows down
More evidence of a recent slow-down in private sector pay growth comes this month from VocaLink, the payment systems specialist which publishes monthly data on take-home pay.
Growth as measured by its FTSE 350 Take Home Pay Index dropped to 2.7% in August, down from 2.9% for the three months to July, which in turn was down from 3.3% in the three months to June. The latest figure for manufacturing was 2.1%, down from 2.6%. Services pay growth at 2.7% is “very much weaker” than in June when it was 3.4%.
At 2.7%, private sector increases are still above levels seen in 2009 and 2010, as a result of April’s increase in income-tax-free personal allowances, but lower than in 2008, when growth averaged 3.3%. In the public sector the latest trend is upwards but only from 1.3% in July to 1.7%. Despite this modest increase, the VocaLink Public Sector Index remains the lowest of all of its take-home pay indices.