iv. Passage reading (2'+8'=10') Pay and the rate of ination In the United Kingdom (UK) in the last three months of 2014 the employment rate was at a record high (23 2%} and total pay had its highest increase since before the world nancial crisis. Total pay (regular pay plus bonuses} rose by an average of 2.1% between October and December 2014. This was partly because of a large growth in bonus payments in the private sector. Average weekly regular pay rose by 1.7% in that period. Private sector total pay rose by an average of 2.5% while workers who were employed in the public sector saw average total pay growth of only 0.7% because of government controls over pay and an absence of bonuses. By comparison, annual ination fell to 0.5% in December 2014 and to 0.3% in January 2015. The Prime Minister said that high employment, stronger productivity and low ination rates are key matters helping economic recovery and an increase in living standards. However, while total hours worked grew by 0.8% in the last three months of 2014, GDP growth was 0.5% implying that output per head fell over the quarter and the increased employment was not boosting Wproductivity. This is not good for a long-term improvement in living standards even if ination is very low. The chief executive of an oil company said that oil companies will have to adapt to a new era of lower prices and a greater emphasis on reducing carbon emissions in order to survive. This is already happening by way of short-term market forces as costs of production come down but long-term structural changes will be needed. His remarks came after two international oil companies announced large reductions in both fixed and variable costs as oil prices fell by 50% in the last six months of 2014 amid a surplus of supply and reduced demand. Fig. 1 UK Pay growth and ination 2008-2015 Sam: m W. JSWZ'OI'E _| |_ l. The article says that public sector workers had an average increase in pay of 0.7% compared with a 2.5% increase for private sector workers. State two reasons given in the information for this. (2') 2. \"In 2014, despite the rise in earnings, both regularpay and real total pay have gradually fallen since 2008.\" Use Fig. l to determine whether or not this is true. (8')