Rise in inflation set to fuel pay claims

Union leaders are warning employers that staff will expect higher wages in order to keep pace with inflation, following increases in the retail price index (RPI) to a 15-year high of 4.4% and the Consumer Prices Index (CPI) to 3%.

Higher furniture and petrol prices are behind the RPI increase while increased fuel costs have pushed up the CPI.

The Treasury yesterday claimed that it is committed to keeping CPI inflation at 2%, but union leaders are predicting that they will be busy ensuring that members’ standards of living are protected. Tony Woodley, general secretary of the Transport and General Workers Union, said: “Pay increases are lagging way behind fact cat rewards, productivity improvements and the soaring costs of basics like food and fuel. Our aspirations in this year’s pay round are going to be more ambitious than for many years past.”

David Prentis, general secretary of public sector union Unison, also warned that unions would resist pay increases lower than RPI for public sector staff.