Economists are divided over the prospects for inflation during the coming period. This is in line with the generalised uncertainty when it comes to the outlook for the economy as a whole. They all predict that the cost of living will rise, but differ when it comes to the likely rate of increase. Continue reading Forecasts: Inflation looks set to rise, but at what speed?
Any readers who have not already made a decision on their pay budget for next year – and perhaps many of those who have – need to keep a close watch on inflation. Continue reading Viewpoint: Keep a weather eye on inflation… and equal pay
The all-items Retail Prices Index (RPI) rose to 1.9% in the year to July 2016, from 1.6% in the year to June. The measure is now just 0.1% lower than its last highest point, in November 2014, when it was 2.0%.
The main upward contribution to the latest increase was from motoring expenditure. Petrol prices rose by 0.9p per litre between June and July this year, to stand at 111.9p per litre, compared to a 0.1p increase at the same time last year. Average premiums for car insurance rose this year by more than a year ago. Other upward pressures came from alcohol and food prices. Continue reading Inflation rises again
The all-items Retail Prices Index (RPI) stood at 1.6% in the year to June 2016, up from 1.4% in the year to May. The last time the RPI was higher was in November 2014, when it was 2.0%. Continue reading Inflation rises further
The ongoing recovery in the UK labour market looks to have continued in the first quarter of 2016, according to the latest figures from the Office for National Statistics. Employment continues to rise, albeit at a slower rate than during 2015, and unemployment also fell marginally, though it still remains above the important milestone of 5%. Continue reading Labour market remains in mostly good shape
Government policy on pay usually has little direct influence over the private sector. But the current official limit of 1% on public sector pay awards, which has been in place since 2010, has arguably played a part – alongside reductions in public spending – in damping down pay pressures in the wider economy. The policy has of course been made easier to maintain by the fact that inflation has been relatively low over most of the period. Continue reading Viewpoint: Is the Government flexible on pay?
Our next detailed analysis of pay settlements will appear in our regular Pay Climate e-bulletin at the end of the month. However, ahead of this we took a look at the figures to see what they might indicate. The figures for the three months to March, based on some 70 awards, show a median of 2%, and a fairly narrow interquartile range between 1% and 2.5%. The average is the same as the median, at 2%. Continue reading Settlements in brief: April pay awards show rise in proportion of higher-end increases
The all-items Retail Prices Index rose to 1.2% per cent in the year to December 2015, up from 1.1% in the year to November. The main factor behind the modest rise in inflation is transport costs, particularly air fares but also, to a lesser extent, motor fuels. Air fares usually rise by around a fifth at this time of year. However this year they rose by almost a half, reflecting strong demand from consumers. Meanwhile petrol prices fell, but by less than a year ago, producing an upward pressure on inflation. Looking at downward effects, food prices continued to fall, but this was not sufficient to offset the upward effects from air fares and petrol. Continue reading Inflation to return to an upward trend?
The all-items Retail Prices Index fell to 0.8% per cent in the year to September 2015, having risen slightly in the year to August to 1.1%. (It was previously level at 1% for a number of months). The fall in inflation is due mainly to prices for clothing and footwear, petrol and gas. Continue reading Inflation remains low