Bonuses deliver big rise in earnings

The latest figures from the LRD Payline database show a median pay increase of 3.0%, both for the three months to March and for the entire pay round since August 2005. Once again, there is no variation in pay deals between the different economic sectors.

The figures for the 12 months to March show no change in the median pay rise, whether calculated by agreements or weighted by the number of workers covered.

Inflation

Growth in the retail prices index (RPI) was unchanged at 2.4% for the year to March, while the RPI excluding mortgage interest payments fell back slightly. The consumer prices index (the government’s preferred inflation measure) also saw a slowdown, to 1.8% from 2.0% the previous month.

Earnings

The latest average earnings figures show a sharp increase in the year to February, with earnings across the whole economy up by 5.3% – well above the (revised) 3.1% increase for the year to January. But this rise is largely accounted for by bonuses; the figure excluding bonuses was 3.9% for the year to February.

The figures including bonuses vary between sectors, with earnings growth much higher in the private than the public sectors, and manufacturing trailing services slightly. If bonuses are excluded, growth in the private and public sectors is identical at 3.9%, while manufacturing (4.7%) is well ahead of services (3.6%).