The proposed new national pay deal does not pose any competitive or inflationary worries, according to NCB Stockbrokers.

Although pay rises averaging five per cent per annum are high by the standards of the last pay deal which covered the years from 1994 to 1999, they are not so high when compared to the 1991 to 1993 period, NCB says.

In addition, pay increases which are in line with productivity growth are not inflationary, the broker says. NCB argues that productivity growth across the whole economy has been a solid 3.5 per cent to 4.0 per cent over the last three decades and when this is added to an inflation rate of around 2 per cent to 2.5 per cent per annum the new pay deal is economically viable.