Pay deals ease to 3.2 pct in 3 mths to April-IDS

LONDON (Reuters) - Sage settlements slipped in the three months to April, a survey that should ease policymakers' fears about second-round inflation effects showed on Friday.

Pay consultant IDS said median pay settlements eased to 3.2 percent in the three months to April, breaking a run of three successive quarters in which the median pay settlement has been 3.5 percent.

Wage inflation is now running a full percentage point below retail price inflation, and only fractionally above consumer price inflation. Consumer price inflation rose to 3.0 percent in April and analysts expect it to rise even higher in the coming months.

"Despite the increase in RPI inflation on the April 2008 data, our measure of pay settlements has fallen to its lowest level since the end of 2007," said Sheila Attwood, editor of IRS Pay and Benefits.

The figures showed public sector pay increases continued to lag behind the private sector. The median pay increase in the public sector was 2.5 percent, one percentage point lower than in the private sector.