Median pay deal holds at 2-1/2 year low

LONDON (Reuters) - The median British pay deal held at a 2-1/2 year low in the three months to March as many companies froze pay to counter the effects of the economic downturn, according to pay consultants IDS.

The median pay deal came in at 3 percent in the three months to March, the same as in February which was the lowest since September 2006, IDS said.

One fifth of the 168 pay deals covering 460,988 workers in the survey were pay freezes, it said.

Official data this week showed average earnings including bonuses in the three months to March fell for the first time since records began almost 20 years ago.

IDS said two-fifths of firms awarded pay rises of 3-4 percent, however.

Mortgage lender HBOS also offered workers a pay rise, with an increase of 4.25 percent in its total salary bill to take effect from May.

HBOS is part of the Lloyds Banking Group, which was rescued from the brink of collapse by the British government with a cash injection of billion of pounds of taxpayers' money.

(Reporting by Fiona Shaikh, editing by Mike Peacock)

Article Published: 18/05/2009