Pay Rises Not Boosted By High Inflation

According to the latest research published by the IRS, pay awards remain low in both the private and public sectors despite high headline inflation.

Analysis reveals that awards were worth a median 1% in the three months ending July 2010, which is four whole percentage points below the rise in the Retail Price Index (RPI) in the same period.

Almost 40% of wage deals resulted in pay freezes, with the majority (58%) of freezes being in the public and not-for-profit sectors. This is a reversal of the situation this time last year, when public and not-for-profit freezes made up just 6.5% of the total.

Other important findings revealed by the figures include:

• The manufacturing sector shows some signs of recovery, with basic pay deals being worth a median 2% in the three months to June 2010. By contrast, the service sector showed a median pay freeze.