Political opponents have lined up to criticise the British government's open door policy for workers from eastern Europe but the influx of cheaper skilled labour is cooling wage rises and helping tame inflation.
Britons may clamour for higher pay as they face soaring domestic bills and, after this month's shock interest rate rise, bigger mortgages. But luckily for policymakers - who fear a wage/price spiral - and unfortunately for the humble worker, there is little evidence to suggest wages are rising significantly just yet.
That is thanks, in part, to a steady flow of skilful east Europeans prepared to work for lower pay, nearly half a million of whom have joined the UK workforce in the last two years. "The pool of available workers has swelled and this has kept a lid on wage pressures," said Alan Clarke, an economist at BNP Paribas.
"Employees are likely to want to be compensated for rising costs of living, yet bargaining power is being diluted by the expansion in the labour pool."
Britain said on Tuesday it had approved entry for 427,095 workers from eight east European countries between May 2004 and the end of June this year, vastly exceeding predictions.
"Immigration from the countries which joined (the EU) in 2004 shows no sign of easing," said Vicky Redwood, an economist at Capital Economics. "As such, strong immigration is likely to remain a key factor keeping UK wage growth under control."
Britain was one of only three European Union members, along with Sweden and Ireland, to granted open access to workers from the countries that joined the bloc in 2004.
With Bulgaria and Romania set to join the EU next year, companies may expect to see more downward pressure on wages even if the government bows to pressure to limit immigration in the run-up to the next election.
While immigrant workers tend to earn more money in the UK than at home, they are rarely unionised and often accept less pay than their British counterparts, making it easier for employers, struggling with high energy costs, to control wages.
"If there are workers out there who have a very good skill set, at the end of the day businesses are in a very competitive market place," said Matthew Knowles of the Federation of Small Businesses.
"They have to take people they can find, providing they are working legally." The Bank of England has been keeping an eye on wage growth to see if rocketing energy and raw materials prices are filtering through to salaries. If those "second round effects" emerge, forecasts for higher borrowing costs, and slower economic growth, will follow.
There are some indications wages are picking up. Official statistics show earnings rose faster than expected in the three months to June, up 4.3 percent. However, most economists regard wage growth as fairly benign and the government has told public sector workers to expect no more than a 2 percent annual pay rise in the future.
Leading pay consultant Industrial Relations Services said average pay awards were 3 percent in the three months to July, less than the retail price measure of inflation used in most pay negotiations which clung to an 18-month high of 3.3 percent. All the while cheap labour is heading to British shores, economists and trade unions anticipate a steady downward pressure on wages.
But with the next wage round upcoming, demands for more pay will grow louder.
"2006 is increasingly looking like a good year for the economy and the cost of living has surged. This argues for an acceleration in wage demands," BNP Paribas's Clarke said.
Unions are also pushing to sign up new immigrants, hoping they will improve conditions for the newcomers and perhaps revitalise stagnant wages and their own influence. "The way to protect those people and our members is to make sure they are employed on the same terms and conditions and that means unionising them," said Catherine Bithell at Amicus, Britain's second largest trade union.
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