Public sector pay freeze ignored as inflation bites

Tim Wallace
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PUBLIC sector workers have seen pay increases outstripping those in the private sector, despite George Osborne’s promise of a pay freeze.

Average regular pay (excluding bonuses) for state workers in the three months to August increased by 2.2 per cent on the same period last year, taking weekly pay to £470 per week.

Private sector workers only saw a rise of 1.6 per cent, and regular pay is lower at £424.

When retail price index inflation – which stood at 5.2 per cent in August – is taken into account, private sector wages fell by around 3.6 per cent.

Increases in public sector pay appear to contradict the chancellor’s 2010 promise to freeze pay for two years.

HM Treasury did not respond to City A.M.’s requests for an explanation in time for publication.

However, the rise may have come about because of a £250 increase promised to those earning under £21,000. Average pay levels may also rise as promotions are awarded.

When bonuses are included, pay increased by 2.1 per cent in the private sector, to £458 per week, and by 2.3 per cent in the public sector, to £476 per week.