Pay rises hold steady in February

Workers in pharmaceutical and chemical sectors saw higher rises

Pay awards in the three months to the end of February increased 3.5%, in line with the previous month's figure, a survey suggests.

Workers in the chemical, pharmaceutical and construction sectors saw rises of more than 4%, according to a survey from Incomes Data Services (IDS).

But the overall average was lowered by deals in engineering and telecoms.

On Thursday the Bank of England kept interest rates on hold at 5.25%, amid concerns about rising inflation.

On Wednesday, Prime Minister Gordon Brown announced that the national minimum wage would rise by 3.8% from £5.52 to £5.73 an hour in October.

Stable rises

Fears exist that rising household bills may lead to demands for higher wages.

This latest IDS report may ease concerns about wage inflation.

"In the real economy, pay bargaining and pay rises continue to reflect RPI inflation, market comparisons and company performance," said Alastair Hatchett, head of pay services at IDS.

"Current levels of increases reflect company stability rather than the panic of financial markets," he added.

The data was based on 105 pay deals affecting 580,000 employees.