UK wage growth hits all time low

Growth in Britons' take-home pay fell for a fourth consecutive month in March to 2%, wage processors VocaLink said today, its lowest annual rate since the survey began in 2004.

It blamed the drop on bonus payments being slashed and the recession dampening workers' wage bargaining power.

Manufacturing was particularly hard hit with annual wage growth hitting a survey low of 1.2% as a number of firms shed workers and implemented pay freezes.

Take-home pay growth in the services sector fell to 2.4%, holding just above the series low but down from 2.9% in February.

VocaLink says it processes over 90% of UK salaries.

"With further steep falls in business and household expenditure expected and pay growth in continued decline, long term deflation is now a real concern," said Douglas McWilliams, chief executive of economics consultancy cebr.

Nevertheless, many Britons with variable rate mortgages are seeing an increase in disposable income as official interest rates have been cut to record lows.