Pay freezes and further job cuts predicted by most UK employers

Nearly two-thirds of employers plan to freeze wages this year, and almost half predict they will have to cut jobs, the British Chambers of Commerce (BCC) has found.

The Monthly Business Survey, to be unveiled at a BCC conference today, has revealed 58% of companies intend to freeze wages in 2009, while 12% said they needed to cut staff pay.

Of the 400 companies polled by the BCC, four in 10 said they would consider making job cuts in the next six months and 12% admitted job cuts would be a certainty.

At the conference today, the BCC’s director-general David Frost is expected to call on the government to do more to help businesses.

Frost will tell delegates: “It is the country’s private sector that has faced all the pain of this recession. The government must realise that the private sector cannot bear all of the pain.

“There was some support in the Budget, but more is needed to help the UK’s embattled businesses so that they can drive our economy out of recession, creating jobs and wealth in the process.”

Conservative Party leader David Cameron has warned that should his party come to power next year, public sector pay would be cut.

The BCC poll also revealed businesses felt the recession was set to worsen, with six in 10 companies believing the economy will deteriorate further, compared to just 10% who thought it would improve.

The BCC results are highlighted by Royal Mail’s decision last week to freeze the pay of its 181,000 staff.