Pay increases start to track inflation

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Salary increases appear to be picking up in response to rising inflation, with recent deals worth at least 3 per cent, according to research from Incomes Data Services.

But the pay analysts said that settlements were still below the current rate of RPI inflation, which is 5.5 per cent and is forecast to remain around 5 per cent until the end of the year.

IDS said seven out of eight awards between December and February were 2 per cent or above, but that figure had edged up to 3 per cent in recent weeks, compared with 1.3 per cent at the same organisations last year.