Basic pay awards have recovered to a median 1.2%, according to the latest analysis from IRS. We look at deals in the three months to October 2009, covering the increase in the minimum wage that was implemented on 1 October 2009 - worth exactly 1.2%.

The minimum wage rise - despite being the lowest in the history of the statutory pay floor - has undoubtedly given settlements something of a boost.

But in the longer term, pay awards look set to stay low. Inflation is expected to rise next year - but not in time to influence January 2010 deals - and the economic recovery is predicted to be slow and uncertain.

For new graduates, the labour market is proving particularly difficult. For the first time in the 20-year history of our annual graduate recruitment survey, the median starting salary for graduates has been frozen at the 2008/09 rate.

Also in this issue, we publish the headline findings of the Government's 2009 Annual Survey of Hours and Earnings, which reveal that the gender pay gap has narrowed slightly over the past year.

Sarah Welfare
Editor,
Pay and Benefits Bulletin

Pay reports recently added to the site:

Scottish Government: 4.5% headline pay increase

Agricultural Wages Board: standard farm worker rates up by 2.2%

Pay review update: 20 November 2009

The latest pay review update table contains pay awards at Unilever, Anglian Water, Thomas Cook and more.

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Statistics and forecasts

The datafile contains the most recent inflation, earnings and labour market statistics, pay settlement data and inflation and earnings forecasts. Our panel of City and academic forecasters expects retail prices index (RPI) inflation to average -0.5% in the final quarter of 2009 but bounce back to 2.1% by the first quarter of 2010. Earnings growth is expected to run at 2% over 2009 as a whole, but is expected to rise in the first quarter of 2010 to 2.9%.

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From the blog

Launched and run by the editorial team that produces XpertHR and the IRS e-journals, the Employment Intelligence blog is regularly updated with news, comment and links to the latest employment developments. Recent posts include:

• The recession is over, says Bank of England MPC external member
• Quiz: employment law changes in 2009
• Has the recession created a “new normal” in reward?

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