Pay deals steady in three months to August

Industrial Relations Services (IRS) said the median pay award in its survey of 73 settlements was 3.0 percent in the three months to August.

Nearly two thirds of pay deals were lower than those received in the same period last year, while just nine percent of pay awards were higher in the quarter to August compared to the previous year, it said.

"Behind the 3 percent headline figure, the range of pay deals has shown a steady downward trend over recent months, and our latest analysis illustrates a marked pattern of lower awards," said IRS Pay and Benefits editor Sheila Attwood.

Pay awards were also lower than the Retail Price Index measure of inflation, which is a benchmark for many pay negotiations, and which hit 3.4 percent in August, its highest in 1 1/2 years.

But Attwood said if inflation remained elevated, there was a risk it could drive up pay deals in the key New Year wage round.

"Looking ahead, potential upward pressures include the impact of higher inflation levels feeding through to inflation linked pay awards," Attwood said.

"However, the key month for inflation linked deals is January, so this will depend on whether inflation maintains its current levels during the autumn."

Bank of England policymakers have been keeping a watchful eye on wage demands and are worried that workers will demand bigger pay rises in January to compensate for high inflation and soaring energy bills.