The rate of wage growth fell last month as companies tightened their belts in the face of increasingly difficult trading conditions, according to figures released by the payment group VocaLink.
The group’s monthly take home pay index for September showed a 0.5 per cent slowdown in UK wage growth, the most significant drop since May.
It warned that coming months could bring further decreases as the impact of recent turmoil in world stock markets and the risk of spill over into economic activity is felt in take home pay.
The most pronounced drop was seen in the manufacturing sector, where wage increases slowed by 1 per cent, the most dramatic fall since November 2006, while the service industry saw a 0.2 per cent slowdown.
VocaLink, which processes over 90 per cent of UK salaries, warned that the fall in wage increases could be accelerated by further economic slowdown.
“These worrying figures show the fragile state of UK industry, which is facing a number of difficult challenges,” it said.
