NEARLY half of all businesses in the North-East will not increase employees' wages in 2012, a survey by the North-East Chamber of Commerce (NECC) has revealed.

The NECC said 48 per cent of companies it surveyed said they would not be changing pay settlements agreed with employees a year ago.

The Business Barometer survey, which is carried out quarterly, found that 1.4 per cent of businesses were actually decreasing wages year-on-year.

However a significant proportion were giving staff a pay rise. Seventeen per cent said their staff would get a two per cent pay increase and 18.4 per cent of businesses quizzed said it would be three per cent.

The NECC's Andrew Sugden claimed businesses were taking a "pragmatic approach" to wage increases in the current economic climate.

Mr Sugden, who is the organisation's director of policy, said: "We need to create more wealth in the North-East and for this to happen we must focus on delivering strong business growth that will positively impact household incomes.

"By taking a pragmatic approach to wage increase, businesses are future-proofing themselves against potential economic fluctuations and will be healthier for it in the long run.

"The fact so many companies are taking this course of action is a demonstration that inflation is not a home-grown issue and interest rate increases are not required in 2012.

"In the current economic climate pay freezes represent a sensible course of action to help companies insulate themselves against global economic conditions and are in-line with the public sector wage freezes we have seen across the UK."

But Kevin Rowan, regional secretary of the TUC, said companies who were imposing pay freezes were expecting employees to take a "leap of faith".

Mr Rowan pointed out that many workers had already agreed to short-term pay freezes and a reduction in working hours at the start of the recession in order to either retain their own employment or help their company survive.

He said: "For a lot of workers that has been in place for two years or more and at the same time inflation has gone up to five per cent.

"There is a point at which it becomes unsustainable. In real terms people's pay has fallen by five, ten per cent or more and that is just not something people should put up with."