Industry pay settlements allay fears of inflation impact

Release date: 13/02/2008

Fears that the increased cost of living would feed through into higher pay settlements in manufacturing appear to have been allayed in early indications from one of the busiest negotiating periods of the year, according to the latest data from EEF, the manufacturers’ organisation.

Publishing its figures for the three months to the end of January, the average level of pay settlements was 3.1%, unchanged from a revised 3.1% for the three months to the end of December.

For the month of January alone, one of the busiest months of the year for wage negotiations, the average settlement figure amongst a total of 213 was also 3.1%. Separately, the proportion of companies deferring their pay agreement rose from just over 3% of settlements to 6%.

Commenting, EEF Deputy Director of Employment Policy, David Yeandle, said:

"These figures would appear to allay fears that the increased cost of living would put upward pressure on pay demands. They should also ease concerns that higher pay settlements would add to the recent spike in input costs from energy and raw materials."

Settlement level - per cent

Number of settlements

Zero (pay freeze)

16

0.01-2.00

9 ( 8 at 2 per cent exactly)

2.01-3.00

121 (86 at 3 per cent exactly)

3.01-4.00

77 (18 at 4 per cent exactly)

4.01 or more

31

The February Pay Bulletin contains information on 254 settlements covering 32,584 employees. Of these, the average settlement was 2.8% in November 2007, 3.1% in December 2007 and 3.1% in January 2008. These figures may be subject to revision to take into account settlements for this period that have not yet been received.

ENDS

Notes for editors

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