Commenting on the latest inflation figures published today (Tuesday), which show Consumer Price Index (CPI) inflation falling sharply to 0.5 per cent – significantly below the threshold of one per cent that triggers an open letter from the Governor of the Bank of England to the Chancellor – TUC General Secretary Frances O’Grady said:
“0.5 per cent inflation shows how fragile the economy is, not just in the UK but also globally.
“While low inflation means we are finally seeing real wages start to rise, it will be many years before they are restored even to their pre-crisis levels. Seven years of falling real wages have undermined incomes and spending power; and the threat of slipping into deflation is very real. It’s a very dangerous time for the Chancellor to be proposing a new round of austerity, which could plunge the economy back into recession.
“We need a strong and sustainable wages recovery, built not just on falling inflation, but on higher pay settlements and more decent, full-time jobs.”