U.K. Wage Bargainers Fail to Win Bigger Raises, Report Shows

By Jennifer Ryan

July 3 (Bloomberg) -- U.K. salary negotiators failed to clinch bigger pay increases than a year earlier in the three months through May to compensate for accelerating inflation, a report by Incomes Data Services showed.

The median salary increase was 3.5 percent in the period, matching the result for the same period in 2007, the London-based researcher said today. The result is based on 168 pay agreements covering 2.5 million workers.

Bank of England Deputy Governor for Monetary Policy Charles Bean told U.K. lawmakers yesterday that faster inflation won't stick provided pay doesn't increase to offset it. The consumer price index reached 3.3 percent in May and the retail price index, used in pay agreements, was 4.3 percent.

The lack of an acceleration in pay ``is mainly the result of a range of lower increases being awarded in the public sector, under the influence of the government's pay policy,'' the report said. ``Pay settlements in the private sector are holding up at relatively high levels.''

To contact the reporter on this story: Jennifer Ryan in London at Jryan13@bloomberg.net