Majority of firms plan to freeze wages as recession continues to bite

The latest British Chambers of Commerce (BCC) Monthly Business Survey, published today, reveals the extent to which company cash flow is being squeezed and the increasing number of employees in the private sector facing pay cuts or freezes.

The results from 400 companies across the UK show that a staggering 58 per cent of businesses are planning wage freezes this year and half of firms are considering or certain to make redundancies in the next 6 months.

The key findings from the survey include:

• 58% of firms plan to freeze salaries this year, with 12% planning to cut wages.
  
  
• 50% of companies are either considering or certain to make redundancies during the next 6 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.
  

In a speech at the BCC’s Annual Convention in Birmingham today, the business group’s Director General, David Frost, will challenge Ministers with the results. He will argue:

“It is the country’s private sector that has faced all the pain of this recession. The results of our most recent poll shows just how hard times are, with half of firms considering making redundancies.

“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 Britain’s embattled businesses so that they can drive our economy out of recession, creating jobs and wealth in the process.”