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Employers optimistic pay rises will stay strong despite recession

Employers optimistic pay rises will stay strong despite recession
Private sector employers are predicting pay rises in the region of 3.5% in 2009, according to research published by pay specialists Industrial Relations Services. This is similar to the level of pay rises seen in 2008, and marks an unexpected optimism from employers amid reports of the UK economy entering a recession.
However, this level of optimism is not spread evenly across the economy. Manufacturing companies are ahead of the pack, comfortably predicting pay rises of 4% in the year ahead. In the services sector, so far more widely hit by the economic downturn, employers forecast 2009 pay rises as being closer to 3%.
Employers expect the current high level of inflation, with retail prices index (RPI) inflation at 5% in September2008, to exert an upward pressure on the level of their 2009 pay rise but they think company performance will exert a net downward pull on 2009 pay awards.

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