Further pay freezes for workers this year
January 26, 2010
The Confederation of British Industry has made a number of predictions recently, and has issued a warning stating that workers should prepare themselves for another year of pay freezes. The CBI has stated that with unemployment levels expected to increase until the autumn of this year it is unlikely that employers will be willing to agree to pay rises, which means that workers will have to cope with a second year without any pay rises.
In addition to warning workers about a further year of pay freezes the CBI has also warned that next year could see more strikes, with spending cuts likely to affect jobs in the public sector which will anger unions and result in more strike action.
The CBI said that it was likely that the level of unemployment next year would peak at around 2.8 million by the autumn, and this reflected a positive revision on its original prediction of a peak of 3 million unemployed by autumn 2010.
In addition to warning about pay freezes and public sector strikes the CBI also said that there was a strong likelihood that the base interest rate, which has been at an all time low of just 0.5 percent for the last nine months, would increase next year and could hit the 2 percent mark. CBI officials also said that whilst the economy would grow slightly the level of growth would remain subdued for at least two years.
The CBI said ‘In the spring many staff will face another cycle of wage freezes, and job losses will continue rising until the autumn. Although the first few months of 2010 will be difficult, growth will gradually pick up and increasing confidence and demand will lead the UK into a more positive 2011. Consumer spending looks to be slightly more resilient than we first thought and a weaker pound will help to support export growth.’
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