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Modest pay rise offset by rising costs, says survey

Average Q1 UK pay rise of 1.9 per cent as cost of living rises by 3.4 per cent.

The study by the Incomes Data Services (IDS) compared the three month period to the end of February with the three month period to the end of March. The results how there was only a 0.1 percent rise in wages over the same period last year, and around 31 per cent of settlements studied showed a pay freeze.

However, the average rise in wages is much lower than the rise in the cost of living, which rose to 3.4 per cent during March, according to the Consumer Prices Index (CPI), with the price of key indicators such as food and petrol remaining high. According to leading economists, the rise of inflation over wage growth affects not only the economy but also consumers' sense of well being.