Private sector wage deals rose 2.5 percent in the three months to October, lagging well behind the inflation rate of 5 percent, while the pay of most public sector workers remained frozen.

Thomson Reuters' Incomes Data Services (IDS) said on Wednesday that the median wage increase across the whole of the British economy was 2.3 percent in the three months to October, down 0.1 percentage point from September's reading.

October is a key month for companies in the lower-paying sectors to hold pay reviews as it coincides with the latest change in the National Minimum Wage, but the report said many pay awards for low-wage workers failed to reflect that increase.

Ken Mulkearn, editor of IDS Pay Report, said: We might have expected most retailers to apply the 2.5 percent increase in the statutory minimum to their own pay scales. Some have, and others have paid above 2.5 percent, but many awards have come in below this level -- though most awards in the sector are above 2 percent.

The data for the three months to the end of October was based on 73 settlements covering 2.25 million employees.

(Reporting by Philip Baillie; Editing by Ruth Pitchford)