Private sector pay 'to trail inflation' in 2011

Published on Thursday, 06 January 2011 14:15
Posted by Scott Buckler

Private sector pay could rise by more this year than in 2010, but is still likely to trail inflation, research by Incomes Data Services has suggested...

...Pay awards were running at 2.2% in November, up from the 2% rises seen in most of the past year, and IDS predicts pay rises may average 3% this year.

However, this is less than half the rate of retail price inflation (RPI).

The public sector in the UK faces pay freezes in most areas as a result of the government's spending cuts.

While the number of explicit pay freezes has been dropping sharply, IDS expects public sector pay rises to fall from a typical 0.75% increase in 2010.

The latest official figures suggest that RPI inflation - which includes mortgage interest payments and is often used by employers when negotiating pay deals - rose to 4.7% in November from 4.5% the month before.Many analysts expect RPI to remain above 4% this year.

Source: ©BBC News

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