Pay deals continue to lag behind inflation despite brighter prospects for the economy, according to a new report.

A study by XpertHR found the going rate was 2%, which is 1.3% below the latest RPI inflation figure.

Median increases over the past year were 2%, compared with 2.3% in the previous 12 months.

The study of more than 1,200 settlements showed that workers in the public sector, where pay has been capped by the Government, received a 1% wage increase.

One in 10 settlements involve a wage freeze, down from one in five last year and over a third in 2009.

Deals in manufacturing firms have been consistently higher this year than those in the services sector.

Sarah Welfare of XpertHR said: "Our research provides further evidence that pay packets have taken a hit during this recession and the value of pay increases in real terms has been eroded.

"In fact pay awards appear to have been slightly lower in value this year than the last. The current evidence points to more of the same, with no signs yet of any upward pressures on pay."

TUC general secretary Frances O'Grady commented: "Many people judge the state of the economy on how far their wages stretch. But with pay rises trailing even further behind the increasing cost of living, the gains from our recovery are not being fairly shared.

"Without stronger wage growth, our recovery will become increasingly built on borrowing and debt - exactly what helped cause the crash in the first place."