Incomes Data Services (IDS) has found that there is little sign of upward pressure on pay rises in the run up to pay round negotiations.
The vast majority of private sector pay settlements though are ahead of inflation, which is on a downward trend, with the Retail Prices Index inflation at 2.5% for the year to October 2005.
IDS Pay Databank estimates a median pay settlement of 3% for the whole economy, for the three months ending November 2005, based on 63 settlements covering 712,000 employees.
IDS is now forecasting that private pay settlements in the January to April period, the key time for pay bargaining in the UK, will be 2.5 to 4%. But the public sector looks set to find it difficult to follow government pressure for a 2% target or limit.
Alastair Hatchett, head of pay services at IDS says: "The conundrum for the School Teachers' Review Body is how to follow the chancellor's advice (on public sector pay) while simultaneously addressing the acute shortage problems of teachers in mathematics, physics and modern languages, and the fact that the age profile of teachers is such that nearly 50% are due to retire in the next ten years."
For a report copy contact Sarah Miller on 020 7250 3434 or visit www.incomesdata.co.uk
