A leading business group has forecast that 2010 will continue to be a tough year for British businesses as they struggle to overcome the effects of recession.

The British Chambers of Commerce's (BCC) Monthly Business Survey for December predicted that businesses "face an uphill struggle in difficult trading conditions."

The survey showed 63 percent of businesses are planning wage freezes or pay cuts for 2010, while 18 percent are considering the removal of benefits, such as bonuses and subsidized gym membership.

Companies' intentions to keep a firm hand on pay rises is an indication that many firms expect 2010 to be a tough year.

This is despite wide expectation, led by the chancellor of the exchequer Alistair Darling, that the fourth quarter of 2009 will see a modest return to growth and a formal end of the recession, which has persisted for six straight quarters and leaves Great Britain as the last G20 nation still in recession.

The survey showed that a majority of firms, 67 percent, would operate at the same or a reduced level in the first quarter of 2010, showing that they did not anticipate a significant economic pick-up in the short term.

This trend continued from November's survey by the BCC, when companies stated that a lack of customer demand was likely to be the biggest obstacle over the next 12 months.

Commenting on the results, David Frost, director general of the BCC, said: "It's clear that another tough year is in store for the private sector. Thanks to businesses and their employees, who have made huge efforts to avoid extra redundancies during this downturn, unemployment is lower than most expected.

"2010 is going to be a crucial year for the UK's economy. The private sector must be allowed to generate investment, growth and jobs by reducing the tax and red tape burden; support and incentives must be provided where needed; and the economy must be rebalanced away from debt and the public sector.

"From what businesses tell me, they will get on with the job of creating wealth and employment, but they simply need government to get off their backs and let them do it."

The BCC's guarded forecast for 2010 came on the same day that the Chartered Institute of Personnel Development (CIPD forecast that unemployment in Great Britain was likely to keep on rising in the first half of 2010, peaking in the summer at 2.8 million.

In its 'Annual Barometer Forecast', the CIPD said another 250,000 jobs would be lost in the first two quarters of 2010.

However, the CIPD, which represents many of the country's human resources professionals, warned that higher-than-inflation pay deals could see unemployment top the psychologically important three-million barrier.

Unemployment hit 2.49 million in the third quarter of 2009, but the rate of increase in job losses has declined in recent months. Even so, the jobless total is less than many experts were predicting a year ago and indicates that employers have been careful to protect jobs in the hope that an economic upturn will arrive soon. Employees have also been flexible and willing to take lower pay awards, in some cases no pay increases or pay cuts and to work fewer hours.

The BCC's survey was based on replies from 260 companies, 77.1 percent of which had less than 50 employees. The BCC figures echo the wary stance of the Confederation of British Industry (CBI) which forecast growth of 0.5 percent in 2009 Q4, formally ending the recession.

The CBI, Britain's leading business organization which represents businesses employing a third of the private sector workforce, backed the growth figure which chancellor of the exchequer Alistair Darling revealed in his pre-budget report on December 9.

The CBI said growth in the first two quarters of 2010 will be weak at 0.3 percent, but this should strengthen as the global economic recovery gathers pace, businesses rebuild stocks and household spending recovers.

In a separate survey released on Monday by the British Retail Consortium (BRC), which represents leading high street businesses, retailers said they too believed 2010 would be a tough year.

Four out of five retailers who responded to the BRC's 2010 Concerns Snapshot Survey, said they expected sales in 2010 to be the same as 2009. None thought sales would be worse, and just over a fifth thought they would be better.

But retailers are concerned about factors that could affect the strength and speed of the recovery. Weak consumer demand topped concerns with 22 per cent of retailers citing it as their main worry for 2010, closely followed by rising unemployment at 20 per cent. The other major concerns were increases in personal taxes and weakness in the economy -- both at 16 per cent.

The uncertainty is affecting retailers' ability to maintain and create jobs, a crucial part of recovery. Nearly a third of retailers said they expected to decrease employment in 2010 compared with this year.

Stephen Robertson, BRC director general, said: "It's been a healthier retail Christmas than last year. Retailers will be hoping this is a permanent turn for the better not a brief break in the gloom.

"It's reassuring that our snapshot shows no retailers expect sales in 2010 to be worse than this year. But factors, such as weak consumer demand and rising unemployment, are at the heart of retailers' concerns about the recovery. Tax rises will mean people have less to spend.

"Politicians must recognize it's business that'll take us out of recession with retail leading. They must bring public finances under control while avoiding excessive tax rises that would undermine demand, jobs and consumer confidence. Targeted, substantial and genuine pruning of public spending must take priority over tax increases."

(Xinhua News Agency December 30, 2009)