Just one in three firms to give pay rises

FEWER than a third of City firms plan to give pay rises in 2005, according to a new study. The majority (64%) of companies in the Square Mile expect basic salaries to remain steady this year with only 36% expecting an increase.

The research, conducted by recruitment consultants Morgan McKinley, also found the average City basic salary increased by 1% in March to £46,990.

However, the research also revealed employers struggling to find people. The number of outstanding job vacancies in March was 10,521, more than double 4,593 a year earlier.

It also found that 64% of City firms anticipate an increase in hiring during 2005. 'Our survey results suggest that City employers are gearing up for further improvements in market activity over the remainder of 2005 and hiring levels will increase accordingly,' said Robert Thesiger, chief executive.

'However, the upward trend in hiring levels is unlikely to lead to great hikes in basic pay rates for the majority of City workers, as experienced professionals in high demand areas are looking for roles that offer a good overall compensation package, definite career progression and a better work/life balance rather than merely a higher salary.'