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UK Pay Growth Falls To Lowest In At Least Six Years
inspector_monkfish
Posts: 9,276 Forumite
00:01 07Apr11 - UK Pay Growth Falls To Lowest In At Least Six Years -VocaLink
LONDON--Pay growth fell to its lowest in at least six years in the first quarter, private-sector data showed Thursday, suggesting that fears of an inflationary spiral caused by wage increases may be overdone.
The data come just hours before the Bank of England makes its latest decision on interest rates. BOE policy makers have said there is a growing case to raise borrowing costs from their all-time low of 0.5% to counter inflationary pressures.
Payment processing firm VocaLink said its take-home pay index grew by just 0.1% in the three months to the end of March compared with the first quarter of 2010. That is down from 0.5% in February's reading, and is the lowest since the data were first produced in September 2004.
Concerns about wage growth, and its potential to fuel consumer price inflation, have been cited by BOE policy makers as one possible reason for raising the bank's key interest rate.
Three of the Monetary Policy Committee's nine members called for an increase in March, but were outvoted by the remainder who wanted proof that the economy is recovering from its surprise contraction at the end of 2010.
Economists polled by Dow Jones Newswires last week predicted the BOE will wait at least another month before increasing the key rate from its all-time low of 0.5%.
VocaLink's findings of very weak pay growth don't tally with surveys such as the most recent Incomes Data Services poll, which indicated an average pay rise of 2.5% in the three months to the end of February.
But even that higher rate of pay growth lags far behind the consumer price index, which climbed 4.4% in the year to February, giving many workers a pay cut in real terms.
The VocaLink index is based on pay rises awarded by more than 200 companies listed on the FTSE 100 and 250 indexes.
LONDON--Pay growth fell to its lowest in at least six years in the first quarter, private-sector data showed Thursday, suggesting that fears of an inflationary spiral caused by wage increases may be overdone.
The data come just hours before the Bank of England makes its latest decision on interest rates. BOE policy makers have said there is a growing case to raise borrowing costs from their all-time low of 0.5% to counter inflationary pressures.
Payment processing firm VocaLink said its take-home pay index grew by just 0.1% in the three months to the end of March compared with the first quarter of 2010. That is down from 0.5% in February's reading, and is the lowest since the data were first produced in September 2004.
Concerns about wage growth, and its potential to fuel consumer price inflation, have been cited by BOE policy makers as one possible reason for raising the bank's key interest rate.
Three of the Monetary Policy Committee's nine members called for an increase in March, but were outvoted by the remainder who wanted proof that the economy is recovering from its surprise contraction at the end of 2010.
Economists polled by Dow Jones Newswires last week predicted the BOE will wait at least another month before increasing the key rate from its all-time low of 0.5%.
VocaLink's findings of very weak pay growth don't tally with surveys such as the most recent Incomes Data Services poll, which indicated an average pay rise of 2.5% in the three months to the end of February.
But even that higher rate of pay growth lags far behind the consumer price index, which climbed 4.4% in the year to February, giving many workers a pay cut in real terms.
The VocaLink index is based on pay rises awarded by more than 200 companies listed on the FTSE 100 and 250 indexes.
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(MSE Andrea says ok!)
(MSE Andrea says ok!)
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