Pay rates 'may fall with deflation'

The inflation situation in the UK could lead to pay rates actually falling, it has been stated.

Discussing the latest pay trends, reward advisor at the Chartered Institute for Personnel and Development Charles Cotton commented: "After the ability to pay, inflation is also a key consideration for organisations and with inflation now in minus territory it is perhaps encouraging pay to fall."

However, he noted, some organisations have already pre-set their pay rates for this year.

Mr Cotton also said that some companies are still growing despite the recession and thus able to increase pay and rewards.

Mr Cotton's remarks come after IDS Pay Databank produced figures this week showing that in the three months to the end of March the average pay increase was three per cent, compared with 3.4 per cent at the end of February.


Published on: May 21, 2009

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