More Bradford employers are likely to offer performance-related pay rises rather than ‘across the board’ rises as fears of a ‘double dip’ recession remain.

Sandy Needham, chief executive of Bradford Chamber of Commerce, said many firms that had imposed pay freezes would face pressure from workers to give rises this year.

According to trade union leaders, freezing workers’ pay would reduce consumer demand and could threaten the UK’s “fragile” recovery from recession,.

The TUC said reports of widespread wage freezes, falling pay in private firms and soaring public sector earnings had been “greatly exaggerated”.

Unions had negotiated some pay freezes and even cuts in firms struggling to survive as an alternative to job losses, but most firms had agreed decent pay rises through the recession, said a report.

Average pay deals were worth 2.3 per cent last year even though inflation was below zero for much of 2009, research for Incomes Data Services showed.

TUC deputy general secretary Frances O’Grady said: “The UK’s deep recession and low inflation have inevitably pushed wage settlements down.

“Unions have sensibly accepted pay freezes where it genuinely helps to keep people in work, but union negotiators are wise to employers exaggerating the need for pay restraint just so they can boost profits.”

But Sandy Needham said that, although confidence was improving among Bradford firms, many were not yet making enough profits to give ‘across the board’ pay increases.

She said: “There will definitely be pressure for pay rises at businesses which have held wage levels during the recession.

“With inflation on the rise again it is inevitable that people will seek to maintain their incomes. Bit I believe the emphasis of many employers will be on performance-related rises as many will not be able to afford increases for all staff.

“At many businesses profitability levels have not yet returned to where they were before the downturn and many companies are hoping just to break even.

“They will be looking to boost sales this year and hoping that the recovery has started, although there are worries about the economy slipping back into a double sip recession.”

France O’Grady said: “With inflation rising, it is only right that both private and public sector staff should look to pay increases in the year ahead. If staff are not paid properly then companies will have no-one to buy their goods and services.”