The research (subscription required), from pay specialists Industrial Relations Services, reveals that private sector organisations are predicting pay rises in the region of 3.5% in 2009. In addition, eight in 10 employees can expect a pay rise next year that matches or exceeds that received this year.

However, this level of optimism is not spread evenly across the economy. Manufacturing companies are ahead of the pack, comfortably predicting pay rises of 4% in the year ahead. In the services sector, so far more widely hit by the economic downturn, employers forecast 2009 pay rises as being closer to 3%.

Employers expect the current high level of inflation, with retail prices index (RPI) inflation at 5% in September2008, to exert an upward pressure on the level of their 2009 pay rise; but they think company performance will exert a net downward pull on 2009 pay awards.

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