Average pay rises have edged up to three per cent in recent months, with fewer firms freezing the wages of their workers.

Most deals were between two per cent and and 3.5 per cent in the three months to September, with an average of three per cent, up from 2.8 per cent in the previous quarter.

Settlements were higher in some parts of the public sector, with one deal worth more than 20 per cent over four years for 50,000 staff in the Ministry of Defence.

A survey of 81 recent agreements by pay analyst Incomes Data Services (IDS)

showed only three wage freezes, fewer than earlier in the year.

Public sector workers have won bigger pay rises this year than staff in private firms, the research showed.

Since April two out of three public sector pay deals have given rises above three per cent, compared with less than half private sector settlements.

Recent deals included a rise of three per cent for most workers at fast food giant McDonald's, 2.8 per cent at the BBC and 3.2 per cent at WH Smith.