UK pay pressures ease in April - Voca |
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Published
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Tue, 08 May 2007 12:23
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LONDON (Thomson Financial) - Concerns about pay pressures in the UK economy may have been eased this morning by the news that the annual rate of growth in take-home pay slowed during April.Voca, which processes more than 90 pct of UK salaries, revealed today that the annual growth rate eased to 3.6 pct in April from 3.7 pct in March.It said this downward trend shows that the expected strong pay increases in the January wage round have so far failed to materialise.A more detailed look at the survey showed that the services sub-index, which reflects take home pay growth in the service sector eased from 4.3 pct in March to 3.6 pct in April, but that the manufacturing sector sub-index rose from 2.7 pct in March to 3.4 pct in April.'The impact of the widely predicted interest rate rise this week will be a further squeeze on household finances as mortgage interest repayments rise,' said Richard Cooper, head of marketing and communications at Voca.The Bank of England is seen as a dead-cert to raise its key repo rate another quarter point to 5.50 pct on Thursday to rein in inflationary pressures. There's even some speculation that the nine-member rate-setting panel may be tempted to lift borrowing costs a half percentage point.In March, consumer price inflation rose by 3.1 pct on an annual basis, while the wider retail price index increased by 4.8 pct.pan.pylas@thomson.compp/ejpCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
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