UK likely to see shrinking salaries in '10

The New Year might see more gloomy faces than smiling ones amongst the UK employees, for majority of companies are either planning wage freezes or pay cuts.

A whopping 63 per cent of the employees surveyed by the British Chambers of Commerce are looking to freeze pay or bring down the salaries of employees.

And other 18 per cent are considering the "removal of benefits, such as bonuses and gym membership".

"The persistent squeeze on the employee pay packet is an indication that companies do not see economic conditions dramatically improving in 2010, despite hopes that the end of the recession may have arrived in the final quarter of 2009," the BCC said in a statement on Monday.

According to the survey of 260 business' in Britain, as many as 67 per cent of the firms would be operating at the same or reduced capacity levels in the first quarter of 2010.

Ravaged by the global financial meltdown, the nation is mired in recession and millions of jobs have vanished as companies embarked on cost cutting measures.

"It's clear that another tough year is in store for the private sector," BCC Director General David Frost said.

Meanwhile, another survey showed that British business leaders anticipate the economy and business activities to pick up in 2010.