Some 91 per cent of employees believe that it is fair to link yearly increases in their wages to inflation, according to a survey by Lansdowne Market Research commissioned by IBEC.

In advance of the recommencement of talks on the pay terms under the new national agreement, the current low rate of inflation at close to 1 per cent must "inform the pending discussions on pay, particularly as agreements already made will push pay up by about 3 per cent in 2004."

However, IBEC says that it would have "considerable reservations" about linking the level of pay increases to inflation.

In the survey, 49 per cent of respondents agreed to a statement that pay increases here ahead of the EU average between 2000 and 2003 had contributed to rising redundancy levels. A total of 34 per cent disagreed with the statement.

According to the data, the strongest majority in favour was among those employed in the private sector facing competition overseas, where 59 per cent agreed with the statement and 27 per cent disagreed,

Between 2000 and 2003 the average Irish person's wage went up by 30 per cent while in the rest of the euro countries pay rose 12 per cent, according to IBEC data.