Most workers are suffering a pay cut, in real terms, because their salaries are not keeping pace with inflation. Pay increases averaged 2 per cent in the past year, lower than the previous 12 months, and well behind the rate of inflation. Inflation is currently 4.6 per cent according to the Retail Prices Index.
One in six settlements involved a wage freeze, with many workers suffering a second successive year with no pay rise. Only a minority of deals kept pace with RPI inflation, mainly involving long-term agreements with a built-in inflation link.