While headline inflation has dipped down sharply over the past few months to below 2 per cent, pay settlements remain on a fairly even keel. The key range for private sector pay reviews is 2.5 to 3.5 per cent, with a particular concentration around 3 per cent. These are among the findings of the latest analysis of pay reviews published in IDS Report.
The latest analysis by Incomes Data Services (IDS) covers some 128 newly monitored pay reviews, the majority taking effect in the second quarter of 2001. There is heavy clustering of second quarter private sector increases at 3 per cent, with a secondary clustering at 3.5 per cent. In large parts of the public sector, April 2001 pay deals have given pay rises of 3.7 per cent.
IDS Report comments that the decline in the annual inflation rate has not yet had an influence on pay bargaining as the RPI is a lagging indicator and the latest batch of pay reviews were decided before the announcement of the April inflation rate in mid-May.
