Manufacturing pay settlements appear to have levelled out below pre-recession levels despite inflationary pressure, according to new research.

Fears had risen that higher inflation would translate into substantial upward pressure on pay, but they were unfounded according to the latest figures from EEF, the manufacturers’ organisation and JAM Recruitment.

EEF’s pay data for the three months to the end of June – including data for April, the second busiest month for pay negotiations – shows that the average pay settlement for the period was 2.5 per cent, the same as the revised figure for the three months to the end of May.

Researchers found that while almost one in five settlements were for more than three per cent, at the other end of the spectrum almost a quarter of settlements are below two per cent, with pay freezes still being agreed in 12 per cent of settlements.

However, continuing the trend seen through the two main negotiating periods of April and January, settlements between two per cent and three per cent remained the most common reflecting economic realism among employers and employees.

Richard Halstead, EEF Midlands region director, said: “After a period of gradual increases, settlements appear to have levelled out below the long-term normal range.