The research, by Incomes Data Services (IDS), indicates that November saw typical private sector pay awards of 2.2 per cent, slightly up on the two per cent achieved during most of 2010. And IDS suggests that average private sector pay may increase by three per cent in 2011.
At least things seem to be heading in the right direction, but the reality is that the Retail Prices Index (RPI) stood at 4.7 per cent in the year to November, leaving private sector pay deals trailing inflation. And there’s little comfort to be had when measuring pay against the Consumer Prices Index, the government’s target measure for inflation, which stood at 3.3 per cent in November.
Public sector workers, who are being hit hard by government action to cut the deficit, are faring even less well. According to IDS, typical public sector pay rose by just 0.75 per cent in 2010 and this year any increases will be lower.
With those in the know expecting RPI to stay above four per cent in 2011, both private and public sector employees are likely to see the value of their earnings continue to decline.
This week’s hike in VAT to 20 per cent is another blow and yesterday the United Nation’s Food and Agriculture Organisation reported that global food inflation hit a record high last month, with a warning that it would be “foolish” to assume it was at its peak.
So it looks as though we’re all in for another round of belt-tightening in 2011, although it’s interesting to note that while Mothercare and Clinton Cards today warned of reduced profits, after severe weather hit business at the end of 2010, Majestic Wine saw like-for-like sales grow by almost four per cent in the nine weeks to 3 January. Whether that’s because we’re deciding to eat, drink and be merry or to drown our sorrows is up for debate.
For more information, please visit www.glazers.co.uk
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