PAY rises averaged 2% in recent months, suggesting wage deals were holding up despite low inflation, according to a new report today.

A study of 74 agreements by the Labour Research Department (LRD) found that average settlements in the quarter to August had not changed since April.

One in five of the deals involved a pay freeze, showing that claims of an economic recovery were not breaking through into pay settlements.

Lewis Emery, of LRD, said: "As in previous months this year, the three month figures to August show that pay is generally continuing to hold up despite the recession."

TUC general secretary Brendan Barber said: "This is a tough time for pay negotiations, but these figures show that pay freezes are the exception not the norm."