LONDON (AFX) - UK pay deals were at 3.0 pct in the three months to December but look set to rise to 3.5 pct in January, according to the Industrial Relations Services.
In its latest survey, IRS said there is early evidence that the higher inflationary pressure in the final quarter of last year has pushed pay awards up in the early part of 2001.
Preliminary analysis of early deals from the crucial January wage round suggests that a rise in settlements is a real possibility, perhaps vindicating the Monetary Policy Committee's wait-and-see approach, the report's author Jeremy Baugh said.
He added that any rise is likely to stoke concerns over the risk to inflation arising from a tight labour market among the more hawkish members of the MPC.
Despite the imminent upturn, however, IRS said it does not foresee a sustained take-off in settlement levels in the months ahead. "Headline inflation is on a projected downward course and the strong competitive pressures on employers to keep a tight lid on paybill costs are likely to have a moderating effect on future pay awards," it said.