Alongside the weakness of the labour market, the labour market figures published yesterday showed pay growth slowing, with some sectors seeing average earnings shrinking.
Before the recession, pay growth of around 4% to 5% was the norm. The latest statistics show that average weekly earnings (including bonuses) across the whole economy rose by just 1.8% in the three months to April 2011 compared with a year earlier, down from the March rate of 2.4%.
With inflation at 5.2% in May (as measured by the Retail Prices Index) and consumer spending a concern (see the retail sales figures for May released today), the latest figures provide yet more evidence that inflation is not feeding through to high wage settlements.
In fact the latest data on pay settlements from XpertHR showed pay awards falling to 2% as a result of public sector deals, with private sector pay rises flat.
To read more, see the Pay Intelligence blog.
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