More than half of British businesses plan to freeze salaries this year, while more than one in ten plan to cut staff pay, according to research published by the British Chambers of Commerce (BCC).
The report, which surveyed 400 UK companies, revealed 58% of firms are planning a salary freeze, with 12% going a step further and cutting pay. However, others planned pay increases of between 1% and 3%, although 9% said they would raise pay by more than 3%.
In addition, more than a quarter (28) said working hours would increase over the next six months, while 22% said they would decrease.
Meanwhile, half of respondents are either considering, or are certain to, make redundancies in the next six months.
Half of the businesses questioned attributed most responsibility for the UK’s current economic position on the banks, with the government seen as most responsible by 37% of respondents. The Financial Services Authority escaped with just 6% of the blame. David Frost, director general at the BCC, said: “It is the country’s private sector that has faced all the pain of this recession. The results of our poll shows just how hard times are, with half of firms considering making redundancies.
“The government must realise the private sector cannot bear all of the pain. There was some support in the Budget, but more is needed to help Britain’s embattled businesses so that they can drive our economy out of recession, creating jobs and wealth in the process.”