The median pay award has held at 3.5% over the three months to 29 February 2008, but pay settlements remain firmly parked below headline inflation, according to the latest IRS analysis (subscription required).
There is a 0.6 percentage point gap between the median pay award and headline inflation, as measured by the annual change in the all-items retail prices index (RPI) (subscription required) (4.1% in February 2008).
Below-inflation pay awards appear to be the norm for the majority of workers, regardless of sector. Public sector workers are feeling the impact of Gordon Brown's determination to keep a tight rein on public sector pay awards, while widespread economic uncertainty constrains the private sector pay bargaining climate.
Elsewhere, our matched sample analysis reveals that fewer than half (45%) the settlements in our sample are set higher than one year previously. This suggests that the recent higher trend in pay awards may be drawing to an end.
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