by business
editor Trevor Sturgess

The UK is poised to come out of recession, but the outlook remains uncertain as many workers face a wage freeze or pay cuts.

That's the conclusion of two surveys by the British Chambers of
Commerce (BCC). Its latest quarterly survey of more than 5,000 businesses across the UK, including some in Kent and Medway, shows improvements in most key economic indicators, especially manufacturing.

However, it has found that progress has generally been weaker than it was in the third quarter of last year. The results suggest the economy is on the brink of leaving recession, but they do not provide conclusive evidence of any robust and significant growth during the fourth quarter of 2009.

The BCC has also found that employees are expected to endure another tough year as businesses continue to face an uphill struggle in difficult trading conditions. Sixty-three per cent are planning wage freezes or pay cuts, while 18 per cent are considering the removal of benefits, such as bonuses and gym membership.

Jo James, chief executive of Kent Invicta Chamber of Commerce, said: "The next 12 months are not going to get any easier despite claims of 'green shoots'.

"After speaking to many of our members, it is unlikely there will be many pay increases this year and further potential pay cuts or reduced hours once businesses start putting together their 2010/11 budget."

Snow had made the situation worse. "Many of our members have been affected and I fear that if this disruption continues it could be the final straw for many businesses who are still on the brink trying to get over the impact of the last 12 months."

David Frost, BCC director-general, said: "Businesses are showing resilience despite difficult and uncertain trading conditions. Confidence is improving, and the boost in exports must be nurtured in order to strengthen Britain’s trade position globally, and to help rebalance the economy away from an over-reliance on the public sector."

He called on the Government to support wealth-creating companies in 2010, avoid extra business taxes and scrap the one per cent increase to employers’ National Insurance Contributions planned for 2011.

"Unless the private sector is given the freedom to create jobs and wealth, the UK’s economic recovery will be slower than it should be, and we will face the serious risk of a double-dip recession."