Boris Johnson Tells Workers To Accept Wage Cuts Otherwise The Uk Faces Stagnant Inflation Of The 1970S

In a keynote address, the prime minister staged a stunning reversal of a promise made just months ago to create a high-wage economy, instead highlighting the pain of rising inflation. “We can not correct the rise in the cost of living just by raising wages to match rising prices,” Johnson said in a speech that marked the latest reshuffle of his troubled prime minister. He said: “If wages are constantly chasing rising prices, then we are in danger of a wage-price spiral like this country experienced in the 1970s. Stagnation – that is, inflation combined with stagnant economic growth. “When a wage-price spiral starts, there is only one cure and that is to put a brake on price increases with higher interest rates. “This has a direct impact on mortgages and rents. “It raises the cost of borrowing for businesses, it’s bad for investment and growth, it’s bad for jobs – it’s bad for everyone.” The prime minister has blamed the war in Ukraine for “brutally disrupting” the Covid recovery, and also denied hopes for early tax cuts or higher spending to help distressed families. He pointed to the “risk of over-indebtedness”, telling his audience in Blackpool: “When faced with inflationary pressure, you can not just spend your time to get out of it. “On the contrary, you have to be careful not to increase the inflationary pressure. We are limited in what we can do. “ The deputy secretary general of the TUC angrily rejected the call for wage cuts as “nonsense”, arguing that only wage increases could offer “financial security”. “It did not take long for the prime minister to abandon his commitment to a high-wage economy,” said Paul Nowak. “British workers have been under the greatest wage pressure for more than 200 years. “They urgently need more money in their pockets.” The prime minister’s call comes just weeks after No. 10 slapped Andrew Bailey, the governor of the Bank of England, for saying workers must accept wage cuts to help control inflation. Mr. Johnson described the purpose of the speech, stressing that “price pressures will make things difficult for a while, but we will overcome it.” But apart from the widely criticized ideas for boosting home ownership, it contained no new measures other than a hint that tariffs would be lifted on imported foods such as olive oil and bananas. Mr Johnson seemed to reject a proposal that he was planning a pre-election cut in income tax by 2 coils – and left two opportunities to struggle with companies refusing to pass on fuel cuts to pumps. Asked why the UK has sunk to the bottom of the global economic growth chart, he said the UK “came out” first of Covid, which meant it was “slightly out of line” with other economies.

title: “Boris Johnson Tells Workers To Accept Wage Cuts Otherwise The Uk Faces Stagnant Inflation Of The 1970S " ShowToc: true date: “2022-11-09” author: “Jared Jackson”