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Cath Everett

Sift Media

Freelance journalist and former editor of HRZone

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Pay awards to remain flat until end of year


High unemployment and the high cost of commodities such as oil mean that pay rates will stay at current levels until the end of the year.

According to an analysis of 99 awards by pay specialists XpertHR, the median pay increase across the economy was only 2% in the three months to the end of July, the same level as a year ago.
Apart from factors such as affordability, a key factor behind the flat figures was the weakness of the labour market. Earlier this week, the Office for National Statistics revealed that the ILO unemployment rate (relating to economically active people) was now 7.9%, while the number of benefit claimants had hit 4.9%, the highest level since February 2010.
Sheila Attwood, XpertHR’s pay and benefits editor, said: “The fragile job market, combined with consumption and demand continuing to be affected by factors including rising food and oil prices, means that we expect no significant, if any, increase in median pay awards for the rest of the summer.”
The firm’s research also indicated that four out of five employers preferred to use RPI rather than CPI inflation measures when setting wage increases, but awards had been below the RPI rate since the end of 2009.
Attwood added there was no indication that this situation would change before the New Year as affordability had so far been the single most important influence on pay levels this year.
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Cath Everett

Freelance journalist and former editor of HRZone

Read more from Cath Everett

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