Only one in five employees expects their pay to rise by two per cent or more this year, dampening hopes that wage increases will spur further economic growth, according to new figures.
Workers on average expect to see earnings rise by just 1.1per cent, according to a survey by Ipsos Mori for financial information firm Markit.
The poll found 21per cent expected a hike of 2per cent or more, with 37per cent expecting a smaller rise, 35per cent a freeze and 7per cent believing their pay will be cut.
Public sector employees expected an average 0.8per cent increase compared with 1.2per cent in the private sector, according to the poll of 973 workers.
Markit chief economist Chris Williamson said: "The survey data indicate that there are clearly few signs of pay growth picking up in 2015. This is a major concern as the sustainability of the economic upturn is largely dependent on pay growth reviving."
The poll comes days after figures showed inflation fell to zero in February. It is expected to turn negative and remain near zero for much of the rest of the year.
Bank of England rate-setters have sought to play down fears of a prolonged and damaging spiral of falling prices, arguing that wages have started to pick up.
However, official data showed the rise in pay growth stalled in the three months to January and the latest figures also paint a pessimistic picture.
Mr Williamson said: "The weakness of pay growth is not just a consequence of public sector pay being hit by austerity-related spending cuts. There are scant signs of pay reviving in the private sector."
He said the only real signs of rising pay pressures were among new hires, where skill shortages were forcing employers to offer higher wages to attract suitable staff.
The Bank of England (BoE) expects real terms post-tax household income to rise by 3.5per cent this year. Lack of upward pressure on wages is more likely to keep interest rates pegged back at their current level.
Mr Williamson said: "The BoE is expecting a revival of pay growth to help support ongoing robust economic growth this year."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article