VocaLink Take Home Pay Index reverses recent increase hitting record low in April

Wed, 05 May 2010 17:32:40 GMT

The VocaLink Take Home Pay Index reflects the continuing uncertainty in the UK labour market as it drops to its lowest level on record of 0.9 per cent. The Index has now fallen below its previous lowest level of 1.0 per cent recorded in February this year. In March, the VocaLink Take Home Pay Index showed signs of recovery as it leapt up 0.5 percentage points to 1.5 per cent, but these gains have been reversed in April’s figures. As the Index continues to fluctuate between a low range of 0.9 per cent and 2.0 per cent, it indicates a fragile, sluggish economic recovery.

The gains made in manufacturing sector pay growth in March have been reversed in April with the VocaLink manufacturing index falling by 0.7 percentage points. Services sector pay growth has also contributed to the drop in the overall VocaLink Take Home Pay Index for April by decreasing 0.5 percentage points to hit just 1.0 per cent.

While the latest industry figures show that the UK economy has continued to grow in the first quarter of 2010, it has done so at a slower pace than in the final quarter of 2009. This fragile recovery means that 2010 is likely to remain tough for households as the recent spike in inflation is not being reflected in higher pay growth. As such, real income growth is weak, which is placing downward pressure on increases in consumer spending.

Marion King, Chief Executive Officer at VocaLink, said: "The drop in this month’s VocaLink Take Home Pay Index continues to show the long-term trend of depressed pay growth. The last 13 months have seen take home pay fluctuate between a range much lower than the 4.0 per cent pre-recession average. Firms are continuing to keep their labour costs contained as competitive pressures remain high and economic activity recovers only gradually. In addition, the uncertainty surrounding the impending General Election is likely to result in caution over major business decisions."

Douglas McWilliams, chief executive of economics consultancy cebr, said: "The first estimate of United Kingdom GDP showed that the economy continued to grow in the first quarter of 2010, but at a slower pace than in the final quarter of 2009. The decline in the rate of growth shows that the recovery is on track but that it is still fragile; this sentiment is reflected in this month’s VocaLink Take Home Pay Index."

VocaLink processes over 90% of UK salaries and the VocaLink Take Home Pay Index, established in 2004, provides the most timely and accurate disposable income data available in the UK. It is based on actual payments made to employees on a three-month moving average compared with the same continuation measure a year earlier. It is affected by changes in tax rates, National Insurance and other employer payments or deductions.

-Ends-

Methodological notes
Interested parties can follow this link to learn more about the VocaLink Take Home Pay Index methodology.

About VocaLink
VocaLink is a specialist payments partner to banks, their corporate customers and government departments. It designs and delivers smarter domestic and international automated payments systems, and smarter ATM switching solutions.

In fact, Vocalink's switching platform connects over 60,000 ATMs, the world’s busiest network, while its payments platform processes over 500 million payments per month.

Vocalink's Real-time Payments Platform is the central infrastructure for the UK's Faster Payments Service, whilst the company partnered wit

VocaLink Take Home Pay Index starts on road to recovery following all-time low

Thu, 08 Apr 2010 10:00:37 GMT

The VocaLink Take Home Pay Index for March has recovered from its all-time low in February to record a rise of 0.5 percentage points, bringing the index to 1.5%. The rise has been significantly aided by a strong rebound in manufacturing sector pay growth which increased by 0.9 percentage points in March. However, even though the economic recovery is underway, there is still significant spare capacity in the economy. As a result, since March last year, the VocaLink Take Home Pay Index has stabilised between a 1.0% and 2.0% range, which is significantly lower than the 4.0% pre-recession average.

For manufacturing, the VocaLink index rebounded sharply in March to 1.3% from its record low level of 0.4% in February. This index now stands at the average level experienced in 2009, though still significantly lower than the 3.2% average level of 2008. Much of this recent improvement in the manufacturing sector is due to the turning inventory cycle, which is expected to provide a boost to overall economic growth in the first quarter of this year. However, it is unclear whether this rise in manufacturing output will be temporary or sustained.

Meanwhile, the VocaLink services index edged up by 0.2 percentage points to 1.5% in March. Despite being above the VocaLink manufacturing index, the services index remains a full two percentage points below its average level over the past five years of 3.5%. The main reason for this relative underperformance is the excess capacity in the economy.

Marion King, Chief Executive Officer at VocaLink, said: "Arguably, UK employers are using wages, instead of employment, to control costs much more so than in the past. As a result, wage growth remains at a structurally lower level; this trend is set to continue throughout 2010 as employers put off making long-term decisions around raising employment and/or wages."

Douglas McWilliams, chief executive of economics consultancy cebr, said: "While the rise in March’s VocaLink Take Home Pay Index is a large move relative to the level of the index, it acts to merely take the index to the midpoint of the 1.0% to 2.0% range that it has been fluctuating in since March 2009. It is clear that wage growth will continue to remain at historically depressed levels until upward pressures emerge from significant rises in employment."

continuation measure a year earlier. It is affected by changes in tax rates, National Insurance and other employer payments or deductions.

Ends

Note to editors:
The VocaLink Take Home Pay Index is an important aspect of the UK’s economic performance and one of the components that drives the Bank of England’s Monetary Policy Committee’s (MPC) interest rate policy due to be announced on 8th April.

About VocaLink
VocaLink is a specialist payments partner to banks, their corporate customers and government departments.

VocaLink designs and delivers smarter domestic and international automated payments systems, and smarter ATM switching solutions.

In fact, the VocaLink switching platform connects over 60,000 ATMs, the world’s busiest network, while its payments platform processes over 500 million payments per month. Having pioneered electronic payments for over 40 years it’s perhaps no surprise that many major organisations have come to rely on our services.

Vocalink is very proud of its service delivery record. Its platforms ope

Banca d'Italia, ICBPI and VocaLink work together on SEPA payments

Tue, 30 Mar 2010 17:01:57 GMT

London, Milan, Rome, 30 March 2010: The Italian infrastructure for clearing and settlement of retail payments (Clearing and Settlement Mechanism – CSM) ICBPI/BI-COMP, operated by Banca d’Italia and Istituto Centrale delle Banche Popolari Italiane (ICBPI), and the international payments specialist VocaLink today announced that they are collaborating to establish a link for the exchange of SEPA payments based on the European Automated Clearing House Association (EACHA) interoperability standards. The customers of the two CSMs will thus be able to count on a fast, cost-effective and reliable way of achieving mutual reach, with no need for participation in the reachable CSM.

The provision of reciprocal interconnection services between the CSMs managed by VocaLink and ICBPI/Banca d’Italia, allowing them to mutually exchange (and settle in TARGET2) SEPA compliant payments on behalf of their respective banking communities, will contribute to the SEPA aim of developing a fully integrated and competitive retail market with no differences between national and cross-border payments.

VocaLink and ICBPI/Banca d’Italia plan to enable their customers to execute SEPA Credit Transfers already in the course of Q2 2010. Afterwards the CSMs will start assessing the extension of the interoperability to the SDDs as well.

Franco Passacantando, Managing Director for Central banking, markets and payment system Area at Banca d’Italia, says: “The planned interoperability of the Italian clearing system with the UK’s VocaLink Euro CSM represents a further initiative taken by Banca d’Italia to fully support the SEPA, also by means of direct provision of services. It is a necessary step towards the integration of the single European market for retail payments.”

Giuseppe Capponcelli, General Manager at ICBPI, comments: “SEPA brings unique challenges for European banks and corporates. ICBPI's involvement in an interoperability arrangement with VocaLink will allow us to provide additional services to banks working with either party.”

Giacinto Cosenza, Italian Country Manager at VocaLink, adds: “We are delighted to be working with the Italian infrastructures in this strategically important market. This is a major milestone on the path to deliver VocaLink's SEPA solutions to the Italian market while further growing our CSM reach in continental Europe.”

ENDS

About Banca d’Italia
Banca d’Italia, the central bank of the Republic of Italy, manages the multilateral clearing and settlement component (BI-COMP) of the Italian retail payment system, which enables settlement in central bank money of euro payments made by means of paper or electronic instruments. Entities acting in free competition and in compliance with Banca d’Italia provisions on this matter, among which ICBPI, carry out the activities preparatory to clearing payments handled via electronic procedures. The transactions settled in 2008 by means of BI-COMP amounted to over 2 billion in volume, for a total value of €3,440 billion, equal to 2.2 times the Italian GDP.

To foster the integration of the single market for retail payments in euro, BI-COMP handles SEPA Credit Transfers following the launch of the SEPA and, from November 2nd, 2009, SEPA Direct Debits (both Core and B2B). To enable its community to exchange SEPA payments with participants in other systems, the ICBPI/BI-COMP CSM has been made interoperable with other CSMs at cross-border level (currently Equens and STEP.AT) according to the EACHA model; moreover Banca d'Italia offers an "intermediation" service to exchange SEPA payments with participants in the STEP2 system managed by EBA-Clearing.

About ICBPI
ICBPI GROUP is composed of highly experienced com

VocaLink scales charity heights

Wed, 10 Mar 2010 16:31:48 GMT

VocaLink, the specialist provider of transaction services to banks, has launched a scheme to help raise money for Bonita Norris in her attempt to become the youngest British female to reach the summit of Mount Everest, in order to raise money for Global Angels.

VocaLink, as the official sponsor of the challenge, is trying to raise funds for Bonita and the Global Angels charity through its network of almost 50,000 Mobile Phone Top-Up (MPTU) ATMs across the UK.

To raise the money, VocaLink has managed to get together some of the major UK banks* who have agreed to donate 5p to Global Angels every time someone tops-up a mobile phone** during March and April using a LINK ATM.

Bonita will be climbing Mount Everest to raise money for Global Angels, an international foundation which champions the causes of children around the world to help provide sustainable solutions. Every pound received from public donations goes directly to projects working at grass-roots level to empower children and their communities.

Bonita will be looking to climb Mount Everest’s towering 8,848 meters during May 2010 when conditions are at their best. To complete her climb, Bonita will be putting herself at risk from the dangers of frostbite, hypothermia, snow-blindness, alongside the many other perils associated with extreme altitude climbing.

The MPTU service is available through ATMs bearing the green top-up logo which include Barclays, Bank Machine, Cardpoint, Cashzone, Clydesdale Bank, Cooperative Bank, Coventry Building Society, First Trust Bank, Halifax, Hanco, HSBC, Infocash, Lloyds TSB, Nationwide Building Society, Nat West, Note Machine, Royal Bank of Scotland, Sainsbury’s Finance and Yorkshire Bank.

In addition to the Mobile Phone Top-Up service, Bonita is also auctioning 3 flags which will feature the highest bidders name or personal message. Bonita will take the flags up Mount Everest on her record breaking journey. The first flag auction will run from the 8th to the 14th March, the second flag 15th-21st and the third flag 22nd -28th.

ENDS

Notes to editors:
*Participating Banks include: Lloyds TSB, Nationwide, Bank of Scotland, Barclays, RBS, Halifax, HSBC, Natwest, Coventry, Cooperative Bank, Clydesdale, Yorkshire Bank, First Trust, Tescos Finance, Sainsbury’s Finance.

**Participating Mobile Phone Operators include: O2, Orange, Vodafone, T-mobile, Virgin Mobile, Tesco Mobile.

About VocaLink:
VocaLink is a specialist provider of transaction services to banks, their corporate customers and Government departments. The company processes domestic and international automated payments and provide ATM switching solutions. On a peak day, the VocaLink automated payment platform processes over 90 million transactions and over half a billion in a month.

VocaLink processing services offer banks euro payments reach throughout the SEPA and beyond and are complemented by value-added services that leverage industry expertise and technical capabilities. VocaLink's Faster Payments service is leading innovation in the payments industry.

VocaLink Take Home Pay Index slumps to lowest level on record

Thu, 04 Mar 2010 00:01:57 GMT

The VocaLink Take Home Pay Index for February has continued January’s downward spiral to hit an all-time low of 1.0%. The combination of the two recent consecutive falls has nearly halved the index during that period, taking it from 1.9% in December to 1.0% in February, signifying the Index’s lowest level since its inception in September 2004.

A slower than expected recovery in manufacturing production has contributed to the significant decrease in the VocaLink manufacturing index which also fell to its lowest level on record by tumbling from 1.1% in January to 0.4% in February. Services sector pay growth followed the downward trend with the index recording a drop of 0.3 percentage points to reach 1.3% in February. Though the reduction is relatively modest, a fall of this size is still significant given the index’s current low level.

The bleak news reflects the fragile state of the labour market which is showing few signs of recovery.
The latest official labour market statistics show that unemployment rose in January offsetting the falls seen in November and December. Specifically, the claimant count measure of unemployment increased by 23,500 in January from December which represents its biggest monthly increase since July 2009. The current doubts around economic recovery are exacerbated by the uncertainty caused by the impending general election with employers waiting to see what fiscal policies are put in place by the new government before making significant decisions regarding employment and compensation.

Marion King, chief executive officer at VocaLink, said: "The fact that the VocaLink Take Home Pay Index Report has reached the lowest level in its history reflects the gravity of the current economic situation. The Index has now fallen below the previous low of 1.1% reached in May of last year when we were still in the depths of the recession. This continued fall in wage growth rates combined with rising inflation means that household finances are still under great pressure. Either the recovery will have to strengthen significantly or it will take a long period of slow growth before upward pressure on wages begins to build and the spending power of households begins to recover."

VocaLink processes more than 90% of UK salaries and the VocaLink Take Home Pay Index, established in 2004, provides the most timely and accurate disposable income data available in the UK. It is based on salary payments made to employees on a three-month moving average compared with the same continuation measure a year earlier. It is affected by changes in tax rates, National Insurance and other employer payments or deductions.

VocaLink's switching platform connects over 60,000 ATMs, the world’s busiest network, while the euro payments platform processes more than 500 million payments per month.

VocaLink's Real-time Payments Platform is the central infrastructure for the UK’s Faster Payments Service, whilst it has partnered with BGC, Sweden’s leading payments provider, who now outsource the majority of Sweden’s domestic payments to VocaLink.

VocaLink platforms operate on never-fail technology to ensure total reliability and availability 24 hours a day allowing the company to meet our customer needs.

VocaLink's smarter payments capabilities offer banks, cor

Top Articles Tagged with vocalink

VocaLink Take Home Pay Index reverses recent increase hitting record low in April

VocaLink Take Home Pay Index starts on road to recovery following all-time low

Banca d'Italia, ICBPI and VocaLink work together on SEPA payments

VocaLink scales charity heights

VocaLink Take Home Pay Index slumps to lowest level on record