Private sector pay 'to rise 3.5%'
Updated on 24 October 2008
Private sector employers are predicting pay rises of around 3.5% for their staff next year, according to a new report.
A survey of more than 260 companies by pay analysts Industrial Relations Services (IRS) showed average wage increases in 2009 are expected to be similar to this year's.
The report said the findings reflected "unexpected optimism" from employers in view of the economic downturn and the prospect of a recession hitting industry.
Manufacturing firms are predicting higher rises next year of 4%, while employers in the services sector believe pay increases will be nearer 3%.
Four out of five of those surveyed said they expected pay increases in 2009 to match or exceed rises awarded this year and most believe pay will be linked to performance.
Sheila Attwood of IRS said: "Private sector employers do not seem to have been hit by the full force of recession in the UK just yet. By forecasting 2009 pay rises at 3.5%, they are demonstrating a significant optimism not being played out in the media.
"While the Chancellor has made repeated calls for workers not to demand pay rises to match inflation, it seems that it is the companies themselves who are willing to reward their staff with pay rises that sit some way above the Government's 2% inflation target."
Average pay rises in the three months to September were 3.5%, the report added.
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