Up to a third of SMEs 'can’t afford wage increases': ISME

Small and medium businesses have warned they will not be able to afford wage increases any time soon.

ISME, which represents the sector, said continuing economic challenges mean revenue is not available to fund pay increases.

Chief executive Neil McDonnell said: "There's a sort of 'two-economy' thing at the moment," he said. "We are seeing wages, more or less across the board, rising at a steady 2.5% to 3% in most areas of the economy.

"Unfortunately for some of our member companies, up to a third of them are not going to be able to meet wage pressure. They're not doing it because they don’t want to give wage increases - the money (just) isn't there."