Take-home pay dips in September

LONDON (Reuters) - Take-home pay in the private sector fell for the third consecutive month in September with the manufacturing sector seeing a sharp decline, payment processing company VocaLink said in a survey on Wednesday.

VocaLink's take home pay index, which tracks monthly take-home income levels in Britain using salary payment data from a sample of FTSE 350 companies, declined by 0.1 percentage point to 4 percent in September.

VocaLink, which bases the index on a three-month moving average, projected take-home pay was likely to continue to fall as economic activity would slow further due to the financial crisis.

"As the financial situation worsens and the outlook for the economy becomes bleaker it is likely that the downward trend indicated will continue," said Douglas McWilliams, chief executive at the Centre for Economics and Business Research, which worked with VocaLink on the index.

In the manufacturing sector take home pay was hit particularly hard with a drop to 3.1 percent in September from 4.3 percent in August.

"Despite the depreciation of sterling, which makes UK manufacturers more competitive with overseas companies, many firms are struggling with the high cost of raw materials and weakening world markets," VocaLink said in a statement.

VocaLink captured data from automated salary payments in Britain including Bacs direct credits and direct debits and based the index on employee payments on a three-month moving average.

(Reporting by Golnar Motevalli, editing by Swaha Pattanaik)