Pay increases close in on inflation

Pay rises are lagging inflation by less than 1 per cent, the closest the two measures have been since wage rises first fell behind in December 2009, according to research.

A study of recent deals showed median rises of 2.5 per cent in the three months to July, up by 0.5 per cent from the previous quarter.

Pay information company XpertHR said the headline figure had lifted because there were few public-sector deals in the quarter. Headline pay awards are 0.7 per cent behind July’s RPI inflation figure of 3.2 per cent, said the report. One in six of the 83 settlements studied involved a pay freeze, while around one in eight were worth 4 per cent or more.