Three-fifths of pay increases over four per cent took place in Britain's manufacturing sector during the second quarter of 2007, according to employment analysis firm IDS.
Its quarterly pay databank shows overall public sector pay awards continued in the three to 4.5 per cent bracket, but warned that one-third of all settlements exceeded the four per cent mark.
Pay settlements have a crucial bearing on inflation, which is expected to slip back after the Bank of England imposes another rate hike at some time later this year.
Yesterday the monetary policy committee (MPC) voted to hold rates at their present level of 5.5 per cent.
"Pay pressures may not be inflation-busting, but they are certainly not benign either," IDS pay report editor Ken Mulkearn said.
"The current picture on pay remains strong overall, reflecting both employee requirements to meet higher costs in a range of areas, including food, fuel and housing, and employers looking to negotiate increases within budgets that in many cases are higher than last year."
The media public sector pay increase was three per cent, despite Gordon Brown's insistence that civil service pay be tied to the inflation target of two per cent.
IDS said pay rises in south-eastern councils were responsible but warned that "2007 will be a year in which average earnings levels in the private sector far outstrip earnings growth in the public sector".
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