City economists said slower earnings growth would help offset any boost to inflation from import prices caused by the fall in the pound since Black Wednesday. However, earnings continue to grow more quickly than prices, which rose 3.6 per cent in the year to August.
Earnings growth in service industries fell to 5.75 per cent from 6 per cent in July. Earnings growth in manufacturing and production industries was unchanged at 6.25 and 6.5 per cent respectively. Earnings growth across the whole economy slowed by a quarter of a percentage point.
Lower pay settlements in August included wholesale grocery workers, who accepted a 4.9 per cent rise, against 8 per cent last year, and workers at ICI who took 5.1 per cent, down from 6.4 per cent in 1991.
However public sector pay grew at a rate equivalent to 7 per cent a year in August, compared to 5.5 per cent in the private sector, according to the independent Public Finance Foundation.
Output per head in manufacturing industry was 4.7 per cent higher in August than a year earlier, the highest since March.
The amount spent on wages and salaries to produce each unit of output - an important measure of industrial competitiveness - was 1.8 per cent higher than a year earlier, the lowest figure since April.Reuse content