Jeremy Hunt, the British finance minister, stated on Friday that he did not want to see pay increases for public-sector employees that could slow the rate at which the government anticipates double-digit inflation to decline.
Britain is in the middle of a wave of industrial action in the public sector, the privately managed rail sector, which relies largely on government subsidies, and other businesses, including postal and telecom workers.
Pay for practically all British workers has lagged behind consumer price inflation, which reached a 41-year high of 11.1% in October, and the gap is particularly pronounced in the public sector, where pay climbed by an annual average of 2.4% from July to September.
The Office for Budget Responsibility predicted that inflation would decline to 3.7% by early 2024, according to Hunt.
Hunt stated at a Financial Times-hosted event, “We know that the thing that is making them (public-sector workers) most angry is the erosion of their pay through inflation,”
“We just have to be really careful not to agree to pay demands that have the opposite of the intended effect, and lock in high inflation,” he added.
Hunt would to comment explicitly on claims that he intervened to stop industry proposals for a more generous compensation offer to striking rail workers, which would have required transport ministry approval.
“I think the Treasury, Number 10 (Downing Street), individual spending departments, we are at one in terms of our approach,” he stated.
The Bank of England, which is responsible with reducing inflation, has stated that Britain has suffered a genuine loss of revenue due to soaring energy prices, which implies that widespread, substantial wage increases would not result in a sustainable improvement in living standards.