LONDON (MktNews) - Pay settlements in the UK engineering industry remained steady at 2.8% in the three months to February, despite a tightening labour market and continued skill shortages, the Engineering Employers' Federation said Wednesday.
The EEF said these figures are especially significant as they include 406 settlements for January, the month when the largest number of engineering pay settlements are concluded.
In January alone, the average level of settlements was also 2.8%.
The number of pay freezes has fallen slightly over the last three months to around one in twelve of all reported pay deals and the incidence of pay deferments was very low at only just over 1%.
The latest survey covers 469 pay settlements affecting 52,758 employees. Of these, the December average was 2.7%, January's was 2.8% and, based on a very small sample, February's was 3.0%. The EEF pointed out the figures may be revised when more settlements data are received.
David Yeandle, EEF deputy director of employment policy, commented, "The low level of settlements reported by companies in January 2001, together with the continuing relatively benign inflationary outlook, is setting the scene for the likely pattern of engineering pay settlements for the rest of the year."
He said the absence of wage inflationary pressures should "provide the MPC with the confidence to make further reductions in interest rates over the coming months."