A series of above inflation pay rises in the motor industry helped annual pay settlements increase at an average rate of 3.5 per cent in the three months to the end of October according to IDS, the pay and benefits specialists. This was 0.3 percentage points higher than in the previous three- month period but still below levels likely to trigger interest rate concerns at the Bank of England.

Inflation busting increases included a 4.4 per cent rise at Jaguar in the second year of a three-year deal; a 4.7 per cent rise at Ford also in the second year of a three-year deal and a 5 per cent rise at Land Rover in the first year of a two-year deal. The rises were offset by significantly lower public sector deals as the government's efficiency drive continued to bite.

Andrew Taylor