–UK Q2 Median Pay Deal 2.5%; Unchanged Versus Mar-May
–Median Q2 Private Sector Pay Deal 2.9% Versus 2.5% Mar-May
–Median Q2 Public Sector Pay Deals Unchanged At Zero Vs Mar-May
LONDON (MNI) – Median UK pay deals held at 2.5% in the second
quarter but there was a sharp divergence between public and private
sector deals, with the former reflecting the public sector pay freeze
and the latter rising 2.9%.
The figures from Incomes Data Services show that while median pay
deals in the UK have not risen substantially in response to high
headline inflation, private sector pay growth has accelerated.
The median Q2 private sector pay deal rose to 2.9% from 2.55 in the
three months through May, while the median Q2 public sector pay deal was
zero.
IDS said more than one-in-three Q2 pay awards were in the narrow to
2.0% to 2.99% range, while over half of public and not-for-profit sector
pay deals were zero.
The rival XpertHR pay survey put the median pay deal Q2 pay deal
lower than IDS, at just 2.0%, which is bang-in-line with the Bank of
England Monetary Policy Committee’s 2.0% target.
It is a moot point what level of pay growth that is compatible with
that 2.0% target. The hawks on the MPC, chief economist Spencer Dale and
Martin Weale, who have argued the level may well be lower than it has
been historically.
“It was possible that the rate of wage growth consistent with
inflation returning to the 2% target would be lower than in the past, as
a result of the continued weakness in productivity growth and the
likelihood that businesses would seek to rebuild their profit margins,”
they are recorded as saying in the July MPC minutes.
–London Bureau; Tel: 44-20-7862 7491 or email:drobinson@marketnews.com.
[TOPICS: M$B$$$,MABDS$]
