Vast majority of workers earning below-inflation pay rises

Nearly 95% of UK workers are receiving below-inflation pay increases, according to a new survey.

The survey, conducted by pay specialists Industrial Relations Service (IRS), found the average pay increase in the year up to April 2008 was 3.2%, 1.1% below the Retail Price Index (RPI) measurement of inflation, which stands at 4.3%. It also falls below the consumer price index (CPI) inflation measurement of 3.3%.

The public sector is faring worse. Workers here received a median basic pay rise of 2.5%, which is 1.8% below RPI inflation. Private sector workers are suffering too, with their pay awards amounting to an average of 3.5% - 0.8% below inflation (although 0.2% above the CPI measurement).

"Inflation is being pushed upwards by rising fuel and utility bills. But employees are facing even more of a squeeze on their spending as inflation outruns pay rises," says IRS pay and benefits editor, Sheila Attwood. "In the past three months, just 6.1% of employees have received a pay rise that matches or exceeds the rate of inflation."