Annual pay settlements in Britain’s manufacturing sector were up 2.4 per cent in the three months to February.
The Engineering Employers Federation (EEF), which represents employers in manufacturing, said the three months to February were typically the busiest time of the year for wage deals, and that average settlements were still below the 2.5-3.0 per cent level common before the recession.
Moreover, pay settlements remain well below inflation, currently at 4.4 per cent, and are also below the four per cent rate of wage growth that the Bank of England considers to be consistent with its two per cent inflation target.
“Fears of an escalation in manufacturing pay settlements continue to be unfounded so far,” said EEF chief economist Lee Hopley.
“Despite the cost pressures being faced by both business and their employees, it is clear that continued uncertainty about economic prospects is weighing down on wage negotiations and maintaining a realistic approach.”
Britain’s manufacturing sector has grown more strongly than other parts of the economy since the 2008-09 recession, and some Bank of England policymakers are worried that it could spearhead inflationary wage rises.
The EEF survey was based on 282 settlements covering 42,487 employees. The Office for National Statistics said that average wages excluding bonuses across Britain as a whole rose by an annual 2.2 per cent in the three months to January.