Private sector pay settlements did not keep pace with inflation in May, according to data the Labour Research Department (LRD).

The three-monthly median for May remained steady at 2%, the same as the previous month, reflective of mainly private sector settlements but applied across the private and public sectors, manual and non-manual groups, and in manufacturing and services. This was less than half the current rate of Retail Prices Index (RPI) inflation, 5.1% for the year to May.

There was no difference between the general level of pay deals and the overall median for new agreements (excluding existing long-term deals).

However, according to data available so far the median for new settlements in the public sector has fallen to 1%, without including attempts by local government employers to freeze pay at a national level this year.

In the private sector, pay freezes affected 13% of settlements (19% of new settlements) in the three months to May, largely unchanged from April but down on the higher proportion of pay freezes recorded earlier in the year.