Pay settlements steady despite rising inflation

Pay settlements held steady in February, according to a survey by Industrial Relations Services on Thursday, indicating that building price pressures have yet to feed through to wages.

The figures come a day after official data showing cooling wage growth and falling unemployment provided a similar message for policymakers concerned about the effects of increasing inflation on the economy.

The IRS said the median basic pay award for the three months to February stood at 3.5 percent, unchanged from the preceding two rolling quarters.

"Wage setters are battling conflicting pressures of high inflation and low economic expectations," said IRS Pay and Benefits editor Sheila Attwood.

"April, the busiest month in the pay bargaining calendar, will therefore prove a crucial indicator for the overall direction of UK pay bargaining."

The survey showed settlements in the services sector lagged those in manufacturing, falling 0.4 percentage points to 3 percent while manufacturing pay awards were worth, on average, 3.5 percent.

Figures released on Wednesday showed the number of people claiming jobless benefits fell to a record low in February, while a squeeze on bonuses cooled wage growth in the three months to January.

The IRS survey findings are based on 162 pay awards covering just over 260,000 employees.