After remaining elevated for much of 2008, inflation would finally appear to have peaked, with latest official figures reported on XpertHR (subscription required) today showing sharp falls.
- Retail prices index (RPI) inflation - the most commonly-used measure among private sector pay setters - fell from 5.0% in September 2008 to 4.2% in October. Falling food and fuel prices made the biggest downward contribution to RPI, with depreciating house prices also playing a part.
- Consumer prices index (CPI) inflation - the government's preferred measure stood at 4.5% in October 2008, down from 5.2% the previous month.
The gap between pay and RPI inflation has therefore narrowed. The IRS headline pay award is now 0.7 percentage points below RPI, at 3.5%, according to our latest analysis (subscription required), based on pay settlements concluded over the three months to 30 September 2008.
It will be interesting to see whether the gap changes further when IRS pay data for the three months to 31 October 2008 are published to XpertHR's pay and benefits homepage (subscription required) this coming Friday (21 November 2008).
- Has your organisation recently carried out an annual pay review? If so, and if it has now been settled, please get in touch so that we can add your organisation's pay award to the IRS database.
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