Pay deals have picked up since the start of the year and are now running at about three per cent, a new report claims.

Public sector increases for workers including nurses, teachers and doctors accounted for much of the increase.

An analysis of 50 deals in April by Incomes Data Services (IDS) showed that the average increase has climbed from 2.5 per cent in the first quarter of the year.

Settlements in private firms in recent weeks have ranged from zero to 5.5 per cent, with an average of 2.6 per cent.

Most pay freezes were reported in electronics companies, while the highest increases of more than 5 per cent were in parts of the construction industry.

IDS said: "With the economy picking up, the labour market showing resilience in the face of uncertainty after September 11 and a surge in public sector spending in prospect, the signs are that the low point for pay deals is past".

Of the 239 deals monitored by IDS this year, just under two thirds gave rises of between two per cent and 3.5 per cent.

Just over half of settlements last month were worth three per cent or more.