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Private sector pay rises could be sub-inflationary

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The pay awards granted by private firms in 2011 could lag behind the rate of inflation, a new report has suggested.

Research by Data Services revealed that pay awards averaged 2.2 per cent in November, up by 0.2 per cent on the increases that were made for most of 2010.

Such rises, though, are less than half of the current rate of inflation as measured by the Retail Prices Index, which hit 4.7 per cent in November.

The survey predicted that pay settlements in the private sector may reach 3 per cent in 2011.

However, a number of observers believe that the RPI rate of inflation will stay at over 4 per cent in the coming year, with pay rises trailing behind.