Take-home pay index shows sluggish growth

Sluggish growth continues and pressure remains on wage growth across all sectors, according to the latest VocaLink Take Home Pay Index. At the same time, utility bill increases and university tuition fees are placing upward pressure on inflation, impacting on the real value of wage packets.

The VocaLink FTSE 350 Take Home Pay Index pay growth slowed to 0.5% in the three months to February, down from the previous rise of 0.7%. Since October 2012 the FTSE 350 Index has fluctuated below 1% growth.

Manufacturing was the only sector to show marginal pay growth improvement in the three months to February, rising to 1.1% compared to a previous reading of 0.2%.

Annual growth on the VocaLink Services Index fell slightly in the three months to the end of February, at 0.4% compared to a previous reading of 0.7%. This is the weakest pay growth experienced by the sector since March 2011, reflecting a fall in service sector output in the final quarter of 2012.

Public sector take-home pay growth has also slowed slightly in the three months to February, with annual growth standing at 0.5%. This continues the relatively flat take-home pay growth experienced in the public sector in the past 10 months, during which time pay growth has not risen above 0.7%.

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