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'Worse off despite pay rise'.

PAY rises will average 1.6% next year, although workers in the public sector will receive only 1%, a new report predicts.

Workers will be worse off in 2010 as a result of the moderate wage increases, especially as inflationary pressures boost the cost of living, according to global management consultancy Hay Group. Increases in pay in private firms will be driven by improving company performance, the report said, adding a second year of freezing pay will be a "very hard sell".

But the pressure to keep a lid on public sector pay will be stronger, with many workers facing a wage freeze, said Stuart Hyland of the Hay Group.

He said: "The majority of workers are likely to receive pay rises in 2010, but will effectively be worse off as the cost of living races ahead of their pay packets."

TUC general secretary Brendan Barber said: "These predictions are overly pessimistic. With most economists predicting RPI inflation will increase to around 3% next year, if pay were to increase by 1% it would put a further squeeze on living standards and could threaten recovery."
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Dec 3, 2009
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