Data from the independent pay monitoring body, Incomes Data Services (IDS), shows that pay freezes are now in decline. Figures for the first quarter of 2013 reveal that pay deals where no salary increase was offered account for just 8 per cent of settlements down from 17 per cent six months earlier. This may indicate that contraction of economic activity in some sectors is giving way to a limited degree of confidence of economic growth and a slight tightening in the labour market. Nonetheless, the average pay award was 2.5 per cent, just below the current 3.3 per cent rate of inflation defined by the consumer price index, indicating that real cuts in the value of wages are still, however, being experienced. Within the average figure, more than 85% of pay awards monitored by IDS were recorded at 2% and above. (Ref. 130328)
In the private sector, pay settlements are running at slightly higher levels of around 2.75%. The IDS data covers the key month of April, in which most pay awards are offered and accepted. Within private services, for example, the fast food and leisure sectors have typically been paying awards at the 2.5% benchmark figure, while annual awards at air and rail transport firms have generally been agreed at a higher rate.
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