Pay boost for workers

Firms expect to give their workers average pay rises of 3.5 per cent in the next year, it has been predicted.

A study of 350 companies by pay specialists IRS showed most expected to award wage rises of at least 3 per cent, with a third anticipating increases of at least 4 per cent.

Around one in eight said they would give their staff a 5 per cent pay rise in 2008.

Sarah Welfare of IRS said: "Despite the fact that headline inflation is expected to dip and growth to slow in 2008, employers are not predicting a lull in pay pressures next year. Instead, they see this year's pattern of higher pay awards continuing.

"That may be because headline inflation, which remains relatively high at 3.9 per cent in September, will already be feeding into negotiations for January 2008 pay awards, so the expected fall in inflation will come too late to pull the New Year's pay deals downwards."

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