'Encouraging' figures show pay rises are on the up
New figures have been released showing pay rises have increased in recent months.
Median pay rises have reached their highest level since last summer at 2.5%, according to research by pay analyst Incomes Data Services (IDS).
That represents an increase of 0.5% in the three months to January compared to the previous quarter, IDS said.
The development was described as "encouraging" by TUC general secretary Frances O'Grady, who urged the Chancellor George Osborne to focus his energies on stimulating growth rather than pursuing further austerity measures.
"It's the only way to support healthier pay rises and ease our living standards crisis," she said.
The study shows one in three pay awards in the latest quarterly period were worth between 3% and 3.9%, with such settlements largely occurring in the engineering, automotive and chemical manufacturing sectors.
Ken Mulkearn, head of pay and research at IDS, said that in general businesses tend to use 2% as a base level although those in major difficulties will opt to freeze wages.
He said it is "striking" that the most common pay settlement figure is 3%, as although this is close to the latest RPI inflation figure it still falls short and means that consumers are having to be cautious with their finances.
"While the economy is the main focus, bosses and workers alike will be keeping a close eye on the cost of living over the coming months," he added.
Despite her optimistic note the TUC general secretary voiced similar sentiments, pointing out that households will continue to be faced with a squeeze on their budgets over the coming months.
The study follows on from a report released this week by the Office for National Statistics showing there was a 1.4% decline in real terms in average earnings over the 12 months to December.
There was a 1.3% increase in regular pay, not including bonuses, the ONS said. Its figures suggest CPI inflation was running at 2.7% in 2012.
Copyright Press Association 2013