His country’s top trade union leader says ministers are “spoiling the fight” with workers because inflation is higher than wages.
Frances Ogreddy, general secretary of the Trade Union Congress, said the government should defend wages and increase the wages of public sector workers.
This comes at a time when new inflation figures show that the cost of living has risen by 9.1 per cent year-on-year till May.
Transport workers across the country are on strike because their salaries are not the same as a year ago.
“With inflation doubling faster than the average wage, we need a government that stands up for the working people,” said Ms O’Grady.
“But instead, we have ministers who are fighting with the workers who are taking action to defend their standard of living.”
Sharon Graham, general secretary of Union United, called for an increase in the number of employers who can pay their workers.
Wage Restrictions – Absolutely Not. It’s time to dump her and move on. “
He added: “It is not the workers who are driving up inflation, it is the whole of corporate Britain who have their pockets full.
“Running profits are driving up inflation, which threatens to cut national wages, and yet the majority of politicians are silent.”
Rebecca MacDonald, chief economist at the Joseph Rowntry Foundation, said families would now be worried about rising food and energy prices.
He added that the government’s decision not to increase benefits at this rate would squeeze the rate of inflation into those who are trying to eat.
“Instead of leaning from crisis response to crisis response, the government needs to move forward and address the fundamental inadequacies of our social security system,” he said.
“As a first step in ensuring that benefits actually help people in difficult times, the government should immediately stop reducing debt repayments from benefits at unbearable rates.”
Rising energy prices have squeezed households over the past year.
Gas and oil prices began to rise last summer, as energy demand increased after the Covid-1 lockdown reopened the economy.
But the cost of energy not only affects energy bills, but also requires factories and transport companies to deliver the goods to the end user. So if the price of energy goes up, so will many other things.
As a result, inflation has reached a level not seen in 40 years. The Consumer Price Index (CPI) reached 9.1% in May, and could rise to more than 11% in October, according to the Bank of England forecast.
But at Aegon Asset Management, James Lynch said there was at least some light at the end of the tunnel.
He pointed out that new data released on Wednesday showed that while headline inflation had risen, core inflation had actually fallen from 6.2 per cent to 5.9 per cent.
“It’s been two months in a row that if you look carefully enough, we can see that prices are starting to rise almost as fast,” he said.
Samuel Tombs, a pantheon macroeconomic expert, said Wednesday’s figures showed there were signs that retailers were beginning to believe their margins would be lower.
He said prices of some products, such as used cars, which were rocketed during the epidemic, were starting to “return to the ground”.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Tough competition for market share means retailers will continue to try to absorb as much of these costs as possible and look for cost savings elsewhere.
“Retailers are working hard to do what they can to protect their customers from price increases, including raising price limits, lowering the price of essential commodities and providing discounts to certain vulnerable groups.” To do