Low pay rises take pressure off the Bank
Britain's manufacturing staff showed no sign of pushing for inflation-busting pay deals in March, news which should further soothe the Bank of England's nerves over rising prices.
The EEF manufacturers' organisation - which each month calculates average pay settlements for the preceding quarter - said its figure for the three months to March was 2.4%, unchanged on the three months to February. Figures comes two days after official data for the quarter to February revealed a surprise fall in overall wage growth across the country to 2.2% against an inflation rate of 4%. The latest evidence of pay restraint eases the pressure on the Bank to raise interest rates.
The EEF survey - which covers pay deals at 284 firms employing more than 43,000 staff - showed one in eight settlements still resulting in a pay freeze. Four out of every five agreements was for 3% or less, the EEF added. Chief economist Lee Hopley said: "The Bank of England will be relieved that concerns that high inflation will lead to greater upward pressure on pay have not materialised as yet. But the April pay round will be another important marker for policymakers wary of how pay deals might evolve through this year.
"With most pay data within the Bank's comfort zone it appears that, for now, economic uncertainty and labour market concerns continue to be the main driver of agreements."
