Pay rises outstrip inflation in Q1, as catch up continues

Pay rises agreed in deals negotiated between unions and employers averaged 6.8% in the first quarter of this year, fractionally down on the final quarter of 2023, national statistics agency CBS said on Thursday.

The biggest rise – 12.4% – went to people who work for housing corporations, and whose wages only rose 2.5% last year. Teaching and hospitality industry unions also negotiated a 10% plus rise for their members. In the care sector, wages were up over 7%.

Corrected for inflation at the time, the rise averages 4.3%.

The 2024 Q1 period is the second in a row that rises outstripped inflation since the huge increase in energy prices in 2022, in the wake of the Russian invasion of Ukraine.

Last year, when inflation was still extremely high, rises averaged 7.3%. Inflation is currently around 3% and is expected to drop to 2% by next year.

Wage costs, the amount that a pay rise costs employers, were up 6.9%, the CBS said. This was due to the rise in incapacity benefit premiums paid by employers.