How low will pay go, asks the CIPD

A spokesperson for the Chartered Institute of Personnel and Development (CIPD) has voiced his concern about falling pay in the UK.

Charles Cotton, CIPD reward adviser, said inflation a "key consideration" for many organisations and with it currently in negative territory, it may exert downward pressure on pay.

He explained that in the public sector, 2009’s pay is already decided and "to an extent that is keeping pay levels up".

In previous economic downturns, pay fell and hit the floor at circa 1.5 per cent, Mr Cotton added.

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"It will be interesting to see how far pay falls in 2009 and whether there is a floor through which it won’t fall or whether it will continue to zero, he concluded.

Average earnings, including bonuses, fell by 0.4 per cent in the year to March 2009, according to the latest figures from the Office for National Statistics. This is down from the February rate of 0.2 per cent.