The Chartered Institute of Personnel and Development (CIPD) has suggested that restraint should be used when dealing with pay rises in the coming months in a bid to keep a cap on inflation.
John Philpott, chief economist at the CIPD, said average pay rises need to be modest in order to reduce the risk of a wage-price spiral and ensure the economy does not suffer an increase in unemployment levels.
"If there are inflation-matching pay hikes, the consequence will not be a damaging pay-price spiral of the kind the economy experienced in times past, but instead fewer jobs," said Mr Philpott.
He added that there is currently little sign of increasing pay pressure in the economy and employers are now in a better position to keep pay rises under control, even though inflation levels are rising.
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But now could be a "challenging time" for employers and the importance of modest pay deals needs to be demonstrated to staff, Mr Philpott said.
The CIPD notes its aims are, among others, to promote good practice in people management and development, and to uphold the highest management ideals.
