Pay rises are 'set to fall'

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Average awards have been 3.5% since the end of last year, but a study of 70 agreements this month showed the figure had fallen to 3%.

Fewer than one in three rises were higher than the previous year, said pay specialists IRS, while increases in private firms were around 1% higher than the public sector over the past year at 3.5%.

Sheila Attwood, of IRS, said: "Our sample of April pay awards clearly shows that pay awards are receding at a faster rate than headline inflation.

"More pay awards are worth less than a year ago, and Gordon Brown seems to be succeeding in keeping a lid on public sector awards.

"The fact remains that pay awards are some way below RPI inflation and not providing for a real increase in pay for many employees."