Pay settlements rising - report

1:22am Thursday 28th August 2008

Rising inflation has led to a wider spread of pay deals, with higher settlements increasing to 4.5% in recent months, according to a new report.

Average deals are running at 3.5%, but almost half of recent agreements were worth at least 4%, said pay analysts Incomes Data Services (IDS).

A study of 57 settlements showed increases ranged from 3% to 4.5%, but the best deals increased from 4.2% to 4.5% over the three months to July.

Ken Mulkearn of IDS said: "Higher and rising inflation is having an effect on pay negotiations in the private sector, but pressure on profits is also a key part of the picture as the economic outlook worsens.

"These contradictory pressures will be foremost in the minds of decision-makers as they plan ahead for 2009 pay reviews."