Inflation rises but growth in pay is slowing

The latest figures from LRD's Payline database show settlements averaging 3.2% in the three months to September: a slight reduction on the median of 3.4% for the three months to August. With a 3.4% median, private sector settlements were generally higher than those in the public sector (3.0%). Manual settlements (3.4%) outperformed non-manuals (3.1%), while both the manufacturing and the service sectors had medians of 3.2%.

Earnings

According to the government's Average Earnings Index, growth in earnings for the year to August was sharply down at 3.9% from the 4.6% (revised) increase in the year to July. The more stable three-month average showed a 4.2% increase for the year, unchanged on July.

Manufacturing and services both had annual increases averaging 4.0% for the year to August, but increases in the public sector (4.3%) were ahead of the private sector's average increase of 3.8%.

Inflation

The big news on the inflation front is that, while the retail prices index (RPI) has continued to fall and now stands at 2.7% for the year to September, the consumer prices index (CPI) - the government's preferred measure of inflation - has risen to its highest-ever level of 2.5%.

The remaining inflation measure, the RPI excluding mortgage interest payments (RPIX), has also increased again, reaching 2.5% for the year to September.