Circular No. NP/240/13
18th September 2013
H.O. Ref: R14/5
TO: ALL BRANCHES, REGIONAL COUNCILS, REGIONAL OFFICES,
COUNCIL OF EXECUTIVES & HO OFFICERS.
Dear Members,
RMT PAY BULLETIN: September 2013
Inflation to date
The Retail Price Index (RPI) is used not just for pay negotiations, but also for calculating the
return on index-linked government debt, the interest on student loans and rail fare
increases. RPI fell to 3.3% for the year to August 2013, up from 3.1% the month before.
The Consumer Price Index (CPI) is designed for comparing different EU countries’ economic
performances and not for internal UK purposes. It excludes housing costs (though includes
stockbrokers’ fees), uses a formula less responsive to price fluctuations and doesn’t
adequately reflect changes to ordinary workers’ cost of living: so says the Royal Statistical
Society. CPI fell to 2.7% for the year to August 2013, down from 2.8% the month before.
Future RPI inflation
The latest predictions of what RPI will be for Q4 2013 and Q4 2014 include:
Q4 2013: 3% (average of most recent forecasts made May - September 2013)
3.4% (HSBC), 3.3% (Deutsche Bank, ING, Santander, UBS), 3.2% (Bank of America/
Merrill Lynch, Barclays), 3.1% (CBI), 3% (British Chambers of Commerce, Goldman
Sachs, Morgan Stanley, Schroders), 2.9% (Citigroup, Commerzbank, Credit Suisse),
2.8% (Nomura), 2.6% (Société Générale)
Q4 2014: 3.1% (average of most recent forecasts made May - September 2013)
3.9% (HSBC), 3.7% (Société Générale), 3.5% (Credit Suisse), 3.4% (UBS), 3.3%
(ING, Morgan Stanley, Schroders), 3.2% (Goldman Sachs, Nomura, Santander),
3.1% (CBI), 3% (Barclays), 2.8% (Bank of America/ Merrill Lynch), 2.7%
(Commerzbank, Deutsche Bank), 2.5% (Citigroup)
Back in March 2013, the Office for Budget Responsibility (independent publicly-funded body
established in 2010) predicted that RPI would tick up to 4% as follows:
2013: 3.3% (Q3), 2.9% (Q4)
2014: 2.8% (Q1), 2.7% (Q2), 2.8% (Q3), 2.9% (Q4)
2015: 3.0% (Q1), 3.1% (Q2), 3.2% (Q3), 3.3% (Q4)
2016: 3.4% (Q1), 3.5% (Q2), 3.6% (Q3), 3.7% (Q4)
2017: 3.8% (Q1), 3.9% (Q2), 3.9% (Q3), 4.0% (Q4)
Recorded inflation to date plus inflation as forecasted by Office for Budget Responsibility in March 2013
Future CPI inflation
While longer-term RPI is expected to rise to 4%, CPI is predicted to fall back to 2%:
Q4 2013
2.9% (Bank of England forecast made in August 2013)
2.5% (average of most recent other forecasts made May - September 2013)
2.9% (Daiwa, UBS), 2.8% (Bank of America/ Merrill Lynch, EU, OECD, Santander),
2.7% (Barclays, IMF), 2.6% (CBI, Deutsche Bank, HSBC, Morgan Stanley,
Schroders), 2.5% (British Chambers of Commerce), 2.4% (Commerzbank, Goldman
Sachs, ING, Nomura, Société Générale), 2.2% (Citigroup, Credit Suisse), 2.1%
(Standard Chartered)
Q4 2014
2.4% (Bank of England forecast made in August 2013)
2.4% (average of most recent other forecasts made May - September 2013)
3.4% (Société Générale), 2.9% (Schroders), 2.8% (UBS), 2.7% (HSBC), 2.6%
(Morgan Stanley), 2.5% (Credit Suisse, Daiwa, EU, IMF), 2.4% (CBI, OECD,
Santander), 2.3% (Commerzbank, ING, Goldman Sachs, Nomura), 2.2% (Bank of
America/ Merrill Lynch, Citigroup), 2.1% (Barclays), 2% (Standard Chartered), 1.9%
(Deutsche Bank)
Q4 2015: 2.0% (Bank of England forecast made in August 2013)
Back in March 2013, the Office for Budget Responsibility predicted that CPI would drop
down to 2% as follows:
2013: 2.9% (Q3), 2.7% (Q4)
2014: 2.5% (Q1), 2.4% (Q2), 2.3% (Q3), 2.2% (Q4)
2015: 2.2% (Q1), 2.1% (Q2), 2.1% (Q3), 2.1% (Q4)
2016: 2.0% (Q1), 2.0% (Q2), 2.0% (Q3), 2.0% (Q4)
2017: 2.0% (Q1), 2.0% (Q2), 2.0% (Q3), 2.0% (Q4)
Over the coming years the gap that has opened up between RPI and CPI could persist and
widen. It is therefore critical that RPI remains the only measure of inflation for pay
negotiations.
Recent RMT Settlements
Company
Award
Effective From
Train Operating and Freight Companies
Harsco Rail
(ex Amey)
Wabtec Rail
(Doncaster)

2.5%
1 Jan 2013

3%
1 April 2013
Cleaning and Catering
Carlisle Cleaning and
Security (Docklands
Light Railway)
Voith (Alstom Virgin
Trains Contract)


Cleaning staff: 5%
Security staff: 3%
 4.5%
 3%
 February 2015 RPI + 0.5%
(min 4%, taking wage to min £8 per hour)
1 Sept 2013
1 April 2013
1 April 2014
1 April & 1 Oct
2015 (split rise)
Shipping, Docks and Offshore
Heysham Port

2.5%
1 Jan 2013
Recent non-RMT settlements
Company (Sector)
Messier Services
(Manufacturing)
Diodes-Zetex
Semiconductors
(Manufacturing)
James Walker
(Manufacturing)
Cerestar – Cargill
(Food processing)
Yours sincerely,
Bob Crow
General Secretary
Award
Effective From
1 July 2013

3% increase

3% increase; plus 0.5% unconsolidated if 1 July 2013
targets are met

3.05% increase to all rates and allowances
1 July 2013

2.8% increase plus £75 shop vouchers
1 July 2013