Firms warned over pay rises
Companies are being urged to keep wage rises in check in a bid to counter rising inflation.
Following the end of the Shell fuel drivers pay dispute, business secretary John Hutton called for "discipline in public and private sector pay if we are to keep inflation under control".
His views were echoed by the chancellor Alistair Darling who warned that it could take years to get out on an inflationary spiral and suggested inflation could reach as high as levels seen in the 1970s and 1980s.
The Office for National Statistics revealed that the consumer prices index rose from 3% to 3.3% in May, the fastest rate of increase since the measure began in 1997. The retail prices index also rose to 4.3% from 4.2%.
The government's inflation target is 2%.
Post Date: June 18th, 2008