UK pay freezes 'are thawing'

Pay freezes implemented around the UK as a result of the economic downturn are beginning to thaw as companies return to profit and boost salaries, new data suggests.

Figures published by Income Data Services (IDS) reveal that private sector pay deals recorded in 2012 are so far at higher levels than the whole of 2011, with the increase being driven by the manufacturing sector.

The statistics shows that January pay deals are above the 2.5 per cent typically awarded last year, with almost two thirds of these being at three per cent or above.

Ken Mulkearn, editor of IDS Pay Report, said that private sector pay settlements look like they could be higher on average than last year, but the picture so far is only a "partial one".

"If this turns out to be the case, and inflation continues to fall, private sector workers are likely to welcome the prospect of an easing-off in the squeeze on their incomes that most of them experienced over the past 12 months," he added.

TUC general secretary Brendan Barber said that employees will hope that the early indications of an easing in wage restraint spreads into the rest of the economy.

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Posted by John Oak and Wayne Bly

Filed: 02-02-2012