By Daniel Hunter

Pay awards in the UK are stuck at 2% in the second quarter of the year, according to pay specialists XpertHR.

Based on pay settlement data collected by our specialist researchers, XpertHR monitors the level of pay awards across the UK in both the public and private sectors. Our latest analysis, covering the three months to the end of June 2013, reveals that the level of pay rises remains stubbornly low, at 2% - well below the pre-recession norm of 3% to 3.5%.

When compared against inflation on the retail prices index (RPI) measure (the most common inflation benchmark for pay setters), pay awards are sitting 1.3 percentage points below the level of inflation. Although RPI is forecast to fall slightly in the second half of the year, pay awards are not expected to reach higher than 2.5% over the year as a whole.

A full analysis of pay settlements in the three months to the end of June 2013 reveals the following:

- The median whole-economy basic pay increase is 2%.
- The median pay award among manufacturing companies (2.5%) is notably above the rate in the service sector (2.0%).
- The most common pay increase in the private sector is 2%, compared with 1% in the public sector.
- The proportion of pay awards resulting in a pay freeze remains at around one in 10 (11%).

"While RPI inflation rose in June, the level of pay awards has remained static at 2%. Our findings show that employers are maintaining a cautious approach to pay setting - something that we expect to continue through to the year end," XpertHR Pay and Benefits editor Sheila Attwood said.

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