IDS said April was the busiest month of wage bargaining so far in 2008 and private sector pay awards were being reached at relatively high levels against the background of perceptively high inflation. Furthermore, good performance in some sectors of the UK economy had also enabled some companies to apply higher wage rises, it added.

A break-up of figures shows that the top-end of private sector pay deals had risen to 4.3% in the three months to April, up from 4.1% in the three months to the end of March. Elsewhere in the release, pay growth in the energy and water sector was 4.5% in the three months to the end of April, 3.8% for the chemicals sector and 3.9% for engineering.

On the public sector front, median pay growth rate over the corresponding period came in at 2.7%. The data was based on 92 settlements,according to IDS.

In a statement, Ken Mulkearn, editor of the IDS pay report, said, "High and rising prices for necessities are a key influence on private sector settlement levels, and to the extent that the broader economic outlook is uncertain, this hasn't prevented firms in key sectors awarding higher-end increases."

"The contrast with the public sector, where government policy is holding increases at much lower levels, couldn't be greater," he added.

By Gaurav Sharma, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it