Today we have published our Pay Bulletin for November. It is a comprehensive survey of pay settlements, deferment and pay freezes in over 400 of our member companies. It consists of two main parts: pay trends and inflation trends.
How is pay trending?The figure in October is fairly in line with the stable level of pay settlements we have seen for much of the last two years. The three-month average pay settlement was unchanged and stable at 2.4% in October, and 0.1 percentage point more than a year earlier.If all of this seems alien language to you, perhaps an illustration will help:
Source: EEF Pay BulletinHowever, the Labour Statistics published by ONS earlier this week showed a slightly different picture. Official statistics showed another month of slight decline in the rate of pay growth across the economy. In the three months to September, pay rose by 0.7% across the whole economy and by 1.6% in manufacturing. For more details on the labour market statistics, please read Felicity's blog from yesterday.
And what about inflation?Consumer price inflation fell to 2.2% in October, from 2.7% in September, continuing the declining trend since June. It is now at its lowest rate for thirteen months. The two largest contributions to the decline in the rate were from the transport sector and education (university tuition fees component).We expect CPI inflation to dip below the 2% target as the large output gap continues to weigh on margins and subdue earnings growth. The Bank of England's November Inflation Report also revealed a similar picture.