Inflation closes gap on pay

The gap between pay and prices has closed. The latest figures on pay settlements from LRD’s Payline database show the median (midpoint) increase for the three months to August was 2.9%, exactly the same as the increase in the Retail Prices Index (RPI) for the year to August.

The increases in pay settlements varied by sector with the private sector median being 3.0% but the public sector only 1.6%. Manufacturing settlements averaged 3.0% but in the service sector the average rise was only 2.5%.

The annual figures were 2.9% by agreements but just 1.3% by workers covered; the figure by workers covered is dragged down by the public sector pay freeze.

It should be noted that earlier figures from LRD’s Payline database have been revised due to revising the industrial classification used, and the official Average Weekly Earnings figures in the table across have been also substantially revised.

The latest official figures on Average Weekly Earnings show that total pay for the whole economy increased by 1.4% in the year to July, up slightly from 1.3% in the year to June.

The regular pay figures (excluding bnuses) posted a 2.0% rise overall. The sectoral rises were: 2.0% for the private sector, 2.5% for the public sector, 1.9% for services and 2.4% for manufacturing.

Inflation was down on other official measures, with RPI excluding mortgage interest payments falling to 2.9% from 3.2%. The government’s preferred measure, the Consumer Prices Index (CPI), fell to 2.5% from 2.6%.