Private sector employees face pay freezes and cuts next year, the director-general of the British Chambers of Commerce (BCC) has warned.
BCC director general David Frost warned in the Times that employers have started talking about pay cuts in 2009 over the last few weeks.
Mr Frost told the newspaper: "First of all employers talked of pay freezes, but in the last two weeks directors have started talking to me about reducing pay next year.
"This is the third recession I've seen, and I've never seen employers cutting wages before. This shows how bad things have got – nothing is now off limits. If this keeps more people in work it’s surely the better of two evils."
According to the BCC, 43 per cent of member firms plan to freeze wages and salaries in 2009, while a further nine per cent will cut pay.
Construction vehicle maker JCB has already negotiated a £50 a week pay cut with staff to protect jobs, while plans from Corus to reduce pay by ten per cent was rejected by unions.
Meanwhile, civil servants and other state workers are set to receive a two per cent pay rise next year, agreed when inflation was still soaring.
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