Guardian UK: Pay rises and Christmas parties cancelled as companies cut costs

[marmar]

Pay rises and Christmas parties cancelled as companies cut costs
Businesses brace for recession but Brown insists the UK is better prepared than other countries

Heather Stewart and Gaby Hinsliff
The Observer, Sunday October 26 2008



Almost four in five British businesses are cutting back on everything from hiring new staff to paying for the office Christmas party, as they batten down the hatches for a deep recession.

Even before Friday's official figures revealed that the economy had swung into reverse for the first time since 1992, bosses had begun a series of austerity measures, according to a survey of more than 1,000 firms by the Institute of Directors.

Gordon Brown and Bank of England governor Mervyn King both conceded last week that a recession was in store. 'After 15 years of economic growth the party is over,' said Graeme Leach, the IoD's chief economist. 'The pressure on the corporate sector to do something to cut costs is now really starting to come through - but I think people need to be prepared for a lot more bad news over the next 12 to 18 months.'

Four out of 10 businesses said they had cut back on recruitment; 27 per cent had reduced pay or bonuses; and another 27 per cent said they were squeezing the entertainment budget, including the Christmas party fund. Only 22 per cent had taken no cost-cutting measures in response to the credit crunch, suggesting its effects are now spreading beyond the banking and housebuilding industries.

Brown, who yesterday made a brief campaigning visit to Glenrothes in Scotland before next month's by-election, will tomorrow unveil promises to boost employment by using the public sector. John Denham, the higher education secretary, will promise new apprenticeships in public services to help young people hit by slowing recruitment. ......(more)

The complete piece is at: http://www.guardian.co.uk/business/2008/oct/26/credit-crunch-british-business

[Mnemosyne]

1. What about the bonuses?

:crazy:

Argh...