The number of pay deals above four per cent is increasing as inflation in Britain rises, a report by Income Data Services (IDS) shows.
In the three months up to April, the average pay deal held steady at 3.5 per cent, the IDS survey found, yet the number of pay deals above four per cent continued to rise.
Early 2007 saw the number rise from a quarter of all deals to more than a third in the previous three-month period.
"The rising number of private sector deals at or above four per cent is a clear indication of the impact that higher inflation is having on pay negotiations," said Ken Mulkearn, editor of the IDS pay report.
The IDS survey comes after the Bank of England's spree of rate rising in the past eight months, increasing interest rates four times since August to 5.5 per cent.
"At the same time the median settlement level for the whole economy appears to be holding up, despite the downward pressure on settlement levels in the public sector," added Mr Mulkearn.
Larger rises in pay deals had been expected in today's survey yet it is thought that, instead of increasing pay deals, successful staff are being rewarded with one-off bonuses.