Redundancies are likely to continue across the UK into the new year before the economy shows signs of stabilising, the Chartered Institute of Personnel and Development (CIPD) has predicted.
In its Annual Barometer Forecast, the group revealed that the economy is likely to lose a further 250,000 jobs before unemployment levels reach a peak of 2.8 million next year.
Furthermore, the majority of Britons who hold on to their jobs are likely to receive salary increases of below the rate of inflation, the CIPD asserted.
Dr John Philpott, chief economic adviser to the CIPD, said: “Given the likelihood of a rise in price inflation to at least three per cent in 2010 on the Retail Price Index measure, our forecast implies a squeeze on real pay next year.”
He added that this may be difficult to deliver following a recession which has led many private sector employers to introduce pay freezes or cuts.
Unemployment levels could also be at risk of hitting a minimum of three million should the economy take longer than expected to recover, Dr Philpott continued.
The Confederation of British Industry recently warned that businesses should prepare themselves for continued pay freezes and redundancies in the new year.