Pay rises set to outpace inflation

Hampshire Chronicle: Pay rises are set to be ahead of inflation for the first time in years, according to a study Pay rises are set to be ahead of inflation for the first time in years, according to a study

Fresh evidence has emerged that pay rises could soon be ahead of the rate of inflation for the first time in years.

Pay analysts IDS said median awards for the first quarter of the year were 2.5%, in line with RPI inflation, the most commonly used measure of the cost of living for pay-setting purposes.

A study of more than 100 settlements, covering 224,000 workers, showed that three out of five were between 2% and 2.9%, a third were over 3% and only a handful involved a wage freeze.

The last time median pay rises were ahead of RPI inflation was the end of 2009.

Ken Mulkearn, of IDS, said: "As we move into the prime period for annual pay reviews, settlement levels are mostly stable. The main factor in the comparison with the cost of living is the fall in inflation, rather than any rapid acceleration in pay growth.

"However, stronger economic growth may add to upward pressures, and the fact that the national minimum wage is set to rise by 3% will likely have an influence. In any case, it looks like pay could soon be ahead of inflation for the first time in many years."

Official figures last week showed average earnings rising slightly higher than CPI inflation - which is lower than the RPI rate - although that included bonuses.

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