Many Shropshire employers look set to either freeze or reduce staff wages this year in a bid to cut costs.

Keith Winter, of Dyke Yaxley Chartered Accountants, in Shrewsbury, said companies in all industry sectors were facing tough decisions at the start of this new year.

"Research carried out by the British Chambers of Commerce showed that of the 450 UK firms they contacted, 49 per cent were planning to keep salaries on hold, and another six per cent would be cutting wages.

"And six out of ten of the firms said they had already cut or frozen wages at some point in the last three years."

Keith said the decision on wages was not unexpected as companies were facing increasing pressure as 2011 began.

"As well as government spending cuts, they are dealing with increased regulation, and higher taxes with the increases in VAT and national insurance contributions.

"But the good news is that the survey also showed that 45 per cent of the companies surveyed were actually likely to offer employees pay rises.

"Almost a quarter of firms said they did not believe the government cuts would be harmful to their business, but 18 per cent did say they would be delaying investment plans as a result of the downturn.

"It's clear that companies are taking a considered and practical approach to pay settlements in this tough economic climate.

"Many businesses have decided to deal with the reduction in public spending by taking a hit on their bottom line, rather than reducing staff numbers.

"And this is a trend that started during the recession, with firms doing whatever they can to retain their staff, even when conditions are challenging.

"So it's important that employers continue to move forward cautiously in order to steer a course through these difficult times and ensure their business is ready for the upturn when it finally arrives."