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The Office for National Statistics is to publish a new RPI-based measure of inflation, ‘RPIJ’, from this March. It will be published alongside the existing Retail Prices Index, the main measure of inflation used in pay-setting and uprating private pensions, Government bonds and gilts. This move follows a consultation over potential changes to RPI, regarded as necessary because of differences between the RPI and the Government’s preferred measure of inflation for macroeconomic purposes, the Consumer Prices Index (CPI). More
Recent coverage of the costs of public sector pay progression presents a partial picture. Official figures from the Office for National Statistics show that average earnings growth in the public sector is currently below that in the private sector. The latest figures, for the three months to June 2012, show that average earnings in the public sector (excluding financial services) rose by 1.5 per cent compared with the same period a year ago. The corresponding figure for the private sector is 1.8 per cent. This is the closest the two have been all year, with previous figures for 2012 showing an average gap of 0.5 per cent in favour of the private sector. More
TV reviews don’t often figure in our coverage, but Channel 4’s recent reality programme Show Me Your Money’ raised too many interesting issues for us to let it pass without comment. The show told the story of how Charlie Mullins, the owner of a successful London plumbing business, invited his 200 staff to disclose their salaries to each other. This is probably not that ground-breaking for many IDS Pay Report subscribers. But Charlie came up with the novel idea that any discrepancies could only be ironed out by better-off workers taking pay cuts in order to finance pay rises for those earning less. More
The Office for National Statistics has set out how it intends to meet concerns about the Government’s preferred measure of inflation, the Consumer Prices Index (CPI). Stephen Penneck, the Director General of the ONS, has said opens PDF] that the body intends to be in a position to include owner-occupier housing costs in the CPI by early 2013. He also said that the ONS is working to understand and communicate the reasons for the difference between the CPI and the RPI, especially those caused by the formula effect of using different averages for calculating price changes. The ONS will report on this work throughout 2012. More
The latest sharp rise in the RPI, combined with a slight drop in the IDS median pay award, has once more cast a spotlight on the relationship between the cost of living and wages. The current high levels of inflation, coupled with comparatively lower average pay increases, mean that, in what economists and journalists like to call ‘real terms’, earnings continue to fall. More
A clear gap between the level of pay settlements in the public and private sectors is continuing, according to the latest data from IDSPay.co.uk. The median settlement level for private sector deals in the three months to the end of September is 2.6 per cent, up from 2.5 per cent in the three months to August. The median in the public sector remains at zero. More
An IDS survey of HR professionals in leading UK firms has found that over half intend to make the same level of pay award in 2012 as they made in 2011. However, almost a third indicated that they will pay a higher award in 2012, with less than 13 per cent reporting they would make a lower award. More
Talk of the possibility of widespread strikes in the public sector has prompted the usual clichés about the return of 1970s-style industrial relations. There may be similarities but the discontinuities are probably more noteworthy. For instance, take the Government’s public sector pay freeze. This is the first time in living memory that an administration has introduced such a strict policy on public sector pay. And while there are echoes of the incomes policies of the 1970s, there are also important differences. More
