UK companies are trying to fight the credit crunch by cutting staff and freezing pay, according to a survey by the Hay Group consultancy.

Around 37% of the UK businesses surveyed reported that last month they had cut back on staff - almost double the figure from November - and 38% have implemented a pay freeze.

UK companies also reported a much small average base salary increase, an average of 1% compared to 2.8% worldwide.

Despite these figures, British companies are more optimistic about the future then many other nations - possibly reflecting the fact that many UK firms have already taken the action they feel they need to survive the recession, such as salary and wage cuts.