Private sector pay deals lagging behind inflation

The much publicised and scandalous pay freeze in the public sector has obscured poor trends in pay settlements in the much larger private sector of the UK economy: http://www.lrd.org.uk/issue.php?pagid=1&issueid=1446

A Labour Research Department (LRD) survey shows that pay rose on average by just 3.0% in the three months to February while RPI hit 5.5% and CPI was 4.4%. The mid-point increase among newly-negotiated deals, that is those excluding rises under existing long-term settlements, is even lower, at 2.5%.

LRD reports that 'these settlements were virtually all in the private sector where, although there were barely any pay freezes recorded in the three months to February, there were some significant deals below the 3% mid-point. In the construction industry, Thermal Insulation Contractors settled on only a 1.9% pay rise effective from 1 January while efforts to secure a pay rise going back to 2010 under the big Construction Industry Joint Council (CIJC) agreement had still not succeeded.'