Average pay rises have jumped to 3.5 per cent, as higher inflation feeds through to wage settlements, a new report showed today.

The average level of deals has risen from 3 per cent in the first quarter of the year to 3.5 per cent at the start of the second three-month period.

But the pay picture remained mixed, with wage freezes imposed in parts of the manufacturing sector, while rises of up to 7 per cent were being agreed by construction firms.

Pay analysts Incomes Data Services said increases in private firms were running slightly ahead of those in the public sector.

Public sector increases in April ranged from 2.9 per cent for teachers in England and Wales to 4 per cent for local government workers in Scotland.

The 47 private sector deals recorded this month, covering half a million workers, were mainly worth between three per cent and four per cent.

Deals included a 4.5 per cent rise for most workers at supermarket giant Asda and merit rises worth 3.4 per cent for Barclays Bank staff.

A minority of manufacturing companies were deferring pay reviews or freezing pay because of tough trading conditions, said the report.