Pay rises still falling behind inflation

The latest figures from LRD’s Payline database show settlements running at 3.9%; this is the three-monthly median to June and is unchanged from the revised figures for April and May.

The median varies slightly between manufacturing at 4.0% and services at 3.9% and more significantly between the private sector at 3.9% and the public sector at 2.9%.

With inflation measured by the retail prices index (RPI) rising to 4.6% from 4.3% the gap between settlements and inflation has widened.

Other measures of inflation have also increased with RPIX (the inflation rate excluding mortgage interest payments) at 4.8% up from 4.4%, and the government’s preferred measure the consumer prices index (CPI) rising to 3.8% from 3.3%.

The average earnings index for the whole economy rose by 3.3% in the year to May, down from the revised figure of 3.5% for the year to April.

If bonuses are excluded the figures are 3.6% in the year to May, down from 4.0% for the year to April.

Average earnings increases including bonuses vary from 3.4% in the private sector to 3.1% in the public sector, and 3.3% in manufacturing to 3.5% in services.

If bonuses are excluded average earnings in the year to May increased by 3.6% in the private sector, 3.8% in the public sector, 3.0% in manufacturing and 3.8% in services.