Faster growth in both prices and earnings

Once again, our database of settlements shows little change since last month: the overall median for the three months to November is 3.0%, although private sector pay is showing faster growth (3.5%) than it was last month.

Other pay analysts show a three-monthly median of 3.0% to November (Industrial Relations Services) or 3.1% to October (Incomes Data Services).

Earnings

The latest figures on average earnings from National Statistics show the that the earnings increase across the whole economy has climbed to 4.2%, whilst services (4.3% average increase) are well ahead of manufacturing (3.4%).

The public sector remains ahead of the private sector, with increases of 4.8% compared with 4.0%.

Inflation

Whichever measure is used, inflation has risen this month. The all-items Retail Prices Index (RPI) has risen to 3.4% for the year to November, up from the October figure of 3.3%, while the RPI excluding mortgage interest payments (RPIX) is up to 2.2% from 2.1%. The government's preferred measure, the Consumer Prices Index (CPI), has risen more sharply from 1.2% in the year to October to 1.5% in November.

The biggest upward pressure on the RPI came from housing (up 12% in the year), followed by fuel and light (11.1%). Within motoring expenditure, petrol and oil prices also rose by 11.1%.