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Pay rises fall below inflation
Monday November 26th 2012
Wage rises have slumped to well below the rate of inflation, and now sit at their lowest level for over two years, according to a new report.
Research group XpertHR reported that although the RPI inflation was 3.2%, median basic pay rises in the three months to October 2012 were just 1.8%. This was found to be the first increase in the gap between pay rises and inflation since April when a study of 100 settlements was undertaken.
The report claimed that employers are predicting a 2.5% rise in pay awards next year, however, Sheila Attwood of XpertHR warned that for respondents to the survey, controlling payroll costs will be a "top priority" next year. The figures on pay settlements in the report clearly reflect that, and the dip in pay rises comes as many companies continue to freeze pay.
Ms Attwood added that "those at the top end of the range also remain cautious in their increases - just 8% of pay awards in our latest sample are worth more than 3%, compared with 58% over the same period in 2008, just before the start of the recession.
"We see continued caution in pay setting over the coming year, with 2.5% the expected benchmark pay award," she concluded.
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