TUC boss warns over wages “squeeze” as inflation edges down – for now

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Frances O'Grady 2016 TUC

Frances O’Grady has warned of a “squeeze” in wages combining with increased inflation that could “halt” any rises in living standards.

The TUC general secretary spoke out over the risk after the Office for National Statistics said consumer price index (CPI) inflation was at 0.9 per cent in October, down from 1 per cent in September, but amid rising raw material costs.

O’Grady said working people are still recovering from “the longest wage squeeze since Victorian times”.

“With inflation remaining higher, and pay growth slowing, gains in living standards could soon grind to a halt again.”

On the potential issues posed by Brexit, she added: “Leaving the EU will be a major economic challenge for this country. We need investment now to create more decent, well-paid jobs.

O’Grady also called on ministers to boost jobs and wages by investing in rail, roads, housing and clean energy.

She sought to make the case for wage rises in next week’s autumn statement, saying: “working people also need help now to keep their wages ahead of inflation. So the Chancellor should use the Autumn Statement to end the public sector pay cap and announce an increase to the national minimum wage.”

The CPI refers to consumer goods and is measured by looking at a sample of representative items and comparing price fluctuations.

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