But private-sector settlements have been quite low, averaging 3% in the third quarter, according to IDS.
The rise in headline inflation to 3.3% is already affecting pay deals, according to Income Data Services (IDS), and will form the basis for the key negotiating month of January, when many private-sector settlements are reached.
The PM has already indicated that he intends to keep public sector pay settlements reined in.
He said the increase was nearly double the inflation rate at 1.3% and higher than private sector wage settlements over the past year at 1.9%.
As with every downturn, public finances will suffer as less tax is collected, forcing lower public sector pay settlements, and requiring further belt-tightening on the part of credit-dependent consumers.
It remains frustrating that cases involving major criminal misconduct by financial institutions most often result in a large fine and a commitment to follow the law, while individuals are not held to account – leaving the impression that, for the banking sector, these settlements have become little more than expensive parking tickets.
Top mandarins have already agreed to give up bonuses and accept below-inflation pay rises this year to show that the Government is tightening its belt in the recession, and public sector pay settlements have been capped at 1 per cent from 2011.
To stony silence and oddly bereft of drama, Brown promised sustainable public finances would require "cutting costs where we can, ensuring efficiency where it is needed, agreeing realistic public sector pay settlements throughout, selling off the unproductive assets we don't need to pay for the services we do need".
And we are doing the right thing to make sure that for the future as we move into a full recovery we will invest and grow within sustainable public finances — cutting costs where we can, ensuring efficiency where it's needed, agreeing realistic public sector pay settlements throughout, selling off the unproductive assets we don't need to pay for the services we do need.
In 2001-02, for example, public-sector pay settlements ran at under 4% but overall earnings rose by over 5%.
Although private-sector wage settlements have been surprisingly moderate this year, averaging around 2.5%, their rises are still far more than the government's offers to public-sector workers.
