Settlements still in decline

The average settlement level for the three months to October 2001 was 2·4%, slightly lower than the figure of 2·5% that was reported for the previous three-month period. During the same period, the percentage of pay deferments rose sharply from just over 4·0% to 13·5% of all reported settlements, the highest level for almost three years. In addition, the number of reported pay freezes increased to nearly one in five settlements.

EEF deputy director of employment policy, David Yeandle, comments: "This further fall in engineering pay settlements shows that wage inflationary pressures in this sector of the economy remain benign, as companies face increasing pressures to contain costs. It also confirms our view that the Monetary Policy Committee took the right decision to cut interest rates earlier this month."