When is 2.5% not 2.5%

I find it completely maddening when Frown and co go on about the 2.5% settlement for parts of the public sector.
Firstly it is woefully below RPI (ie how prices have really changed, rather than the CPI "official" measure that the BoE uses to measure itself against).
Secondly it isn't 2.5%! OK if you take the two numbers 1.5 and 1, and add them you do get 2.5. But when you do the calculation of how much 100 has increased by after 12 months if you first apply a 1.5% increase, and then a 1% increase after 6 months, the answer you get is not 102.5, but actually 101.83. So its not a 2.5% increase is it?
What is even more annoying is that when this is reported in the media, it is normally only stated as a "claim" by the relevant trade union that it is in fact not 2.5% but something lower. Its not a claim, its a statement of fact. The lie is ever calling it 2.5%
Brown's claim that putting an extra £4.2m[1] into the economy will threaten the inflation rate uncontrollably is probably overstating it slightly.
[1] Assuming 28,000 staff with an average salary of £25k, this is the difference between a 2.5% increase and a 1.9% increase.