Pay deals in engineering and manufacturing firms remain at a "historically low level", according to new figures from the Engineering Employers' Federation (EEF).

For the three months to the end of May, the average settlement was 2.1 per cent, the same as the previous three months.

Nearly one in four firms froze the pay of their staff, while almost ten per cent deferred settlements, according to an analysis of 383 deals affecting more than 55,000 staff.

The EEF said the figures showed it would be "premature" for the Bank of England's Monetary Policy Committee to raise interest rates from the present four per cent.

EEF deputy director of employment policy David Yeandle said: "The continuing historically low level of engineering pay settlements confirms that there is no wage inflation pressure in this sector.

"It therefore reinforces our view that it would be premature for the Monetary Policy Committee to consider raising interest rates."