PAY awards across industry in the North West are still falling, with salary rises posing little threat of pushing up inflation, according to a survey released today.

The average pay settlement in manufacturing during the three months to the end of June was 2.7 per cent, down from 2.8 per cent in the previous quarter and from 3.5 per cent in the same period last year. Pay settlements in service companies were higher, but have also continued to fall in comparison with earlier pay deals.

In the three months to June, the average pay rise in the service sector was 3.5 per cent, down from 3.6 per cent in the previous three months and down from 4.2% last summer.

The figures emerged in the latest Pay Data Bank Survey by the Confederation of British Industry.

CBI chief economic adviser Kate Barker said the figures showed there was no need for the Bank of England to raise interest rates in the near future to fend off inflation.

"A slower pace of job growth and manufacturing job cuts are proving consistent with pay settlements declining in line with lower inflation.

"With UK growth likely to be steady rather than spectacular over the next six months, this data supports our view that talk of interest rate rises is premature," she said.

The CBI's survey is based on pay settlements at 1,500 private sector companies employing about 1.6 million staff.

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