Pay settlements in the three months to 31 January have delivered the biggest average UK pay rises in nearly six years, raising fears last year's surge in energy prices will be converted into permanently higher inflation, reports the Times.
Median pay deals monitored by pay consultant Incomes Data Services (IDS) rose from 3.05% in December to 3.5% last month. Median settlements had been close to 3% through most of 2006, while average earnings, including bonuses, rose by 4.1% in the year to November. The Retail Prices Index rose by 4.4% in 2006, a 15-year high, which ensured long-term deals promising inflation-linked rises this year are likely to result in earnings going up at a rate that will alarm the Bank of England’s Monetary Policy Committee, says the paper. Ken Mulkearn of IDS said if inflation stayed high until ...
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