Prices surge further ahead of pay rises

The latest figures from LRD’s Payline database show the median settlements in the three months to September standing at 4.1%. This is slightly up on the 4.0% recorded for June to August.

The main variation within this is between public and private sectors with the public sector median of 3.0% trailing well behind the private sector median of 4.1%. Services were also lower than the overall median at 3.8%.

With inflation up, whichever measure is used, the gap between pay rises and price rises is growing wider. The retail prices index (RPI) for the year to September was up at 5.0% from the 4.8% recorded in August. RPIX (which excludes mortgage interest payments) was also up at 5.5% for the year to September from the 5.2% recorded in August. The government’s preferred measure, the consumer prices index (CPI), overtook the RPI in September rising to 5.2% — its highest level ever.

Average earnings increases, meaning all elements of earnings such as increments and overtime, vary from 3.0% in manufacturing to 3.3% in services and from 3.1% in the private sector to 3.6% in the public sector when bonuses are included. If bonuses are excluded, average earnings in the year to August increased by 3.6% in the public sector and 3.4% in the private sector, 2.5% in manufacturing and 3.7% in services.