Pay awards show renewed surge, latest data suggests

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The Independent Online

The size of pay awards has risen sharply according to a snapshot survey of 50 deals struck in April and published today by a leading group of analysts.

The average wage increase surged to 3 per cent last month compared with 2.5 per cent for the first three months of the year, Incomes Data Services (IDS) said.

The rise was driven by increases across the public sector but private companies agreed to pay awards as high as 5.5 per cent – more than four times the rate of inflation.

A clutch of public sector pay deals took effect on 1 April for NHS staff, the armed forces and schoolteachers that added 4 per cent to the pay bill.

IDS said the private sector was more diverse with deals ranging from pay freezes from some engineering companies to a 5.5 per cent award for 20,000 engineering workers covered by a collective deal.

Economists expect that official average earnings figures for March, published tomorrow, will show a rise in the annual growth rate from February's record low of 1.9 per cent to about 2.3 per cent.

Meanwhile, the pace of the high street spending slowed markedly last month from March's strong surge in retail sales, the UK's major shops said last night. Sales volumes grew at an annual rate of 5 per cent in April compared with March's 10.3 per cent, which was the strongest since the building society demutualisation boom of the mid-1990s.

The BRC said the annual figure was distorted by this year's early Easter and pointed to the average for the latest three months that showed an average of 7.6 per cent.

The Bank of England has made clear it wants to see a slowdown in the growth of consumer spending but Bridget Rosewell, chief economic adviser to the BRC, said she "still had to form a firm judgement that it is actually slowing".