Pay deals are trailing behind inflation after remaining at 3 per cent all year, a report showed today. The level of settlements had been increasing towards the end of last year but employers are now refusing to concede claims for above the rate of inflation, it was found. A fifth of the 229 deals monitored by the Industrial Relations Services in the three months to June were for 3 per cent. There have been bigger increases in some industries, including engineering and chemicals at 3.5 per cent - the current rate of inflation. "The burning question now facing the UK economy is whether we will soon see a return to the time-honoured pattern of settlements chasing inflation upwards," said the report.