Wednesday, 19 June 2013

Price rises pile pain on struggling workers


Will Stone

Workers struggling with wage freezes and below-inflation rises were hit by higher prices for basics last month - and worse is set to come, the Office for National Statistics said.

The consumer prices index rise 0.3 points to 2.7 per cent in May.

Officials predict it will top 3 per cent over the summer.

But average earnings increased just 1.3 per cent in the year to April, meaning millions of workers have had a real-terms pay cut.

The retail price index, which includes housing costs, rose 0.2 points to 3.1 per cent.

A 22 per cent rise in air fares, the fastest increase since records began in 2001, helped push up CPI.
Overall transport prices rose by 0.4 per cent between April and May, and the cost of clothing and footwear also rose 1.2 per cent.

Furniture, carpets and garden tools also became more expensive.

Politicians, unions and economists issued a stark warning that plummeting wages are dragging Britain downwards.

Shadow Treasury minister: Catherine McKinnell MP
TUC general secretary Frances O'Grady warned: "Forty consecutive months of real wage falls means people have less to spend on the high street," leaving the economy stuck in the gutter.

Shadow Treasury minister Catherine McKinnell said that "the cost-of-living crisis is deepening," noting that because of inflation and low pay people's spending power is now £1,300 a year less on average than when the coalition came to power.

Left Economics Advisory Panel co-ordinator Andrew Fisher said: "Today's rise in inflation exacerbates the squeeze on wages being felt by workers - sending ever more into poverty and reliance on food banks.

"To tackle low pay, we need stronger trade union rights, a significant rise in the minimum wage and a credible plan to create jobs."

He urged the Labour Party to ditch support for pay freezes for low-paid public-sector workers.

Soaring inflation is also hitting people with savings hard, with none of Britain's 820 standard accounts paying enough interest to outpace tax and inflation, according to Moneyfacts.co.uk.

This article first appeared in the Morning Star

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