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PRIVATE SECTOR PAY INCREASES WORRYING SAYS CIPFA

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Figures published today by CIPFA show that private sector pay was rising at an annual rate of 4.6%. This represents...
Figures published today by CIPFA show that private sector pay was rising at an annual rate of 4.6%. This represents a substantial increase in private sector pay whilst public sector pay was frozen at 1.5% in March.

Private sector pay in March rose twice as fast as inflation whilst the increase in public sector pay was 0.8% below inflation.

'The government says the higher private sector earnings reflect mainly bonus payments and increased overtime and that a firm check on settlements is all that is required,' said CIPFA's research director Chris Trinder.

'The increase is very worrying and could signal a new trend not just a blip. Recent changes in the methods by which private sector pay increases are determined means that continuing high earnings growth could now take place even while basic wage settlements remain low. Individuals are now rewarded in much more complex ways.'

Pointing out that since April, nurses, teachers and the armed forces have had pay increases of around 3%, CIPFA says that a wide gap between the public and private sector which built up during 1993 is expected to continue throughout 1994.
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