Pay rises were higher in the public sector

The survey of 100 recent deals, carried out by the Industrial Relations Services (IRS), found about half were worth between 2.5% and 3.5%.

The recent trend of pay rises in the public sector outstripping those in the private sector continued.

Firms in the public sector gave an average 3.4% rise in the year to May, compared with 2.9% in private companies, the survey found.

Pay still under pressure

IRS Pay and Benefits Bulletin editor, David Carr, said: "The key influences on decision makers in the coming wage round are the two hardy perennials of company performance and changes in the cost of living.

"While pay rises have now caught up with inflation, the prospects for settlements rising much above 3% remains dependent on a sustained upturn in the economy.

"For manufacturers, the weakening of the pound against the euro should ease some of the pressure and help them to win back market share.

"However, with firms eager to rebuild margins and keep costs down, pay settlements in this sector are unlikely to increase significantly for the remainder of this year at least."