The British government must be prudent with public sector wages, while not expecting the economy to enter a recession, said today the British Undersecretary of Finance Simon Clark.
Clark warned that any wage increases in the public sector above inflation would only exacerbate general inflation, which is projected to reach 11% later this year.
Teachers and doctors are among those who have threatened to go on strike if their demands for wages are not met.
“We need to be prudent about payroll,” he told Sky News. “We can not have wage increases above inflation, because that would exacerbate the problem we are trying to solve.”
“We do not expect a recession (…) There are obviously very significant challenges for the global economy … but there are also significant underlying forces in the UK economy,” Clark told the Times.
His comments came a week after the Confederation of British Industries warned that the economy would stagnate next year and could easily slump as growth prospects slump due to rising inflation.
SOURCE: AMPE
Source: Capital
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