Britons cannot expect pay rises to keep up with cost of living, Treasury warns

Business

Britons cannot expect pay rises to keep up with the soaring cost of living, the government has warned.

Treasury Chief Secretary Simon Clarke has said matching salaries to inflation risked causing prices in the shops to surge even higher.

His intervention comes as more than 40,000 staff prepare for a three-day strike that will cripple large swathes of the UK’s train network.

The RMT union has said it is “unacceptable for railway workers to either lose their jobs or face another year of a pay freeze” when inflation is at a 40-year high.

An empty platform is seen during rush hour at London's Waterloo station August 29, 2006

And in other developments, tens of thousands of people are expected to march on Saturday – calling on the government to do more to tackle the cost-of-living crisis.

The protest has been organised by the TUC union, which claims workers have lost almost £20,000 since 2008 because pay has not kept up with inflation.

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More on Cost Of Living

Mr Clarke was quoted by The Daily Telegraph as warning that Britons cannot have “unrealistic expectations around pay” – adding steep wage increases would exacerbate the crisis.

He told the newspaper: “We have to be very careful at this point about preventing inflation from becoming a self-fulfilling prophecy.”

Munroe Elementary teacher Melissa Curry holds a sign during a rally across from the Colorado State Capitol as Denver public school teachers strike for a second day in Denver, Colorado, U.S., February 12, 2019. REUTERS/Michael Ciaglo

Teachers are reportedly planning to march en masse to demand better pay and conditions.

Their union, the NASUWT, said teachers were at the sharp end of the cost-of-living crisis, with essential living expenses surging ahead of wages and the value of their pay plummeting by 19% over the past 12 years.

Eight million households will start receiving cost-of-living payments from 14 July. Low-income households on benefits will get £326 next month as part of a £21bn support package to help with soaring bills, which was announced by the government last month.

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