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Pay freezes to become the norm across the UK

In a move which would place more and more pressure on the UK population it has been announced that more than half of businesses in the country are looking to freeze employee's pay this year with a further 12% looking to instigate wage cuts. While this is an obvious response to what is one of the most difficult economic environments for many years, it does not assist the UK government in the pursuit of a recovery from recession.

As the cost of living continues to rise, even though the RPI is now in negative territory, any wage freezes and wage reductions would push more and more of the UK population towards the financial abyss. The more people who struggle the more assistance they will need from the state which will then push social security payments higher and higher at a time when tax income is still falling in the UK.

This could also delay a flurry of planned tax increases which the UK government is currently keeping secret, even though everybody in the UK is aware of the situation. To say the next 12 months will be a difficult period for the UK economy is an understatement as the government will need to juggle a number of balls in the air at the same time to ensure both national debt and the budget deficit do not mushroom out of control.

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