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Headline inflation still holds the key for pay setters

As headline RPI reaches 4.4%, we find this measure of inflation continues to have a major influence on pay outcomes, while there is little evidence that the CPI measure has taken off as a benchmark.

Key points

  • Pay decision-makers are largely ignoring the Government's preferred measure of inflation, and continue to base their bargaining behaviour on the annual change in the all-items retail prices index (RPI).