Pay settlements are holding steady as the current bargaining year draws to a close, according to pay specialists Industrial Relations Services (IRS).

Analysis of the latest pay settlements reveals that basic pay awards are at an average 3 per cent in the three months to the end of August 2006.

Of these, 64 per cent were worth less than the previous year and only 9 per cent paid a higher rise than in 2005.

IRS researchers collected information on 73 settlements covering 819,409 employees, 60 of which allow for an identifiable basic pay increase. The retail prices index inflation measure stood at 3.4 per cent in August 2006.

Sheila Attwood, IRS Pay and Benefits editor, said: “Behind the 3 per cent headline figure, the range of pay deals has shown a steady downward trend over recent months, and our latest analysis illustrates a marked pattern of lower awards compared with those awarded to the same groups of employees a year earlier.

“Looking ahead, potential upward pressures include the impact of higher inflation levels feeding through to inflation-linked pay awards. However the key month for inflation-linked deals is January, so this will depend on whether inflation maintains its current levels during the autumn.”