Workers face another year of pay cuts or freezes as companies remain cautious about the strength of the economic recovery, new figures from a leading business organisation show.
Two thirds of businesses are planning to cut or freeze wages next year, while one in five is set to cut benefits such as bonuses or gym memberships in an attenpt to trim their overheads, according to data from the British Chambers of Commerce (BCC) published today.
David Frost, Director-General of the BCC, said: “It is clear that another tough year is in store for the private sector.”
The scale of the problems facing businesses in the new year was laid bare as more than two thirds of the 260 businesses surveyed by the BCC said that they would not increase capacity levels in the first three months of the year, instead maintaining their current levels or even cutting them.
The BCC said this was “a strong indicator that businesses believe demand and the trading environment will remain uncertain”.
Although pay freezes or pay reductions will come as a blow to workers, they will enable companies to avoid cutting as many jobs as expected.
Unemployment reached 2.49 million during the three months to October, but the pace of the rise in unemployment has slowed sharply in recent months. Economists now expect unemployment to peak at 2.8 million next year, rather than the three million previously anticipated.
The Guardian