Inflation Surges As Bosses Slash Wages And Jobs

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THE government revealed yesterday that inflation shot up in December with CPI inflation reaching 3.7% (up from 3.3%), and the RPI rate, which includes mortgage costs, reaching 4.8% (up from 4.7%).

Neither constitutes the real inflation rate, that is the rate of the rocketing price of the basic necessities – foodstuffs, clothing, electricity and gas, heating, and car, rail and bus travel – that consumes the incomes and benefits of millions of working class and middle class families. This rate is at least three or four times greater than either the CPI or RPI rate.

The government’s inflation target of 2% has long gone out of sight, and is now just a distant memory.

The ONS statistics claimed that the price of fuel and lubricants rose by 2.8% in the last year, which is not the experience that most people have at the petrol pumps, where the price is rising on a daily basis.

Food prices were held to have risen by 1.6% in the last year with a 0.8 per cent rise from November to December 2010.

The ONS admitted that transport costs had risen by 12.9% during 2010, and that food and non-alcoholic drinks gained 6.1% – with vegetable costs up by 8% – while restaurant and cafe prices, overall, rose by 3.6% over the year.

The trade unions give a much more realistic picture as far as price rises are concerned.

They said yesterday that ‘Hundreds of thousands of staff are facing the prospect of losing their jobs, and all are being hit with a 3% hike in their pensions contributions.

‘At the same time, inflation and VAT hikes have piled the pressure onto family budgets. The price of fuel has gone up by 37% since Jan 2007, and food has gone up by 25% in the same period.

‘Recent research revealed a “poverty premium”, whereby low-income families spend nearly £1,300 more each year on basic goods, services and on heating their homes than better-off workers.’

The December state inflation rate figure put the Bank of England under even more pressure to raise interest rates, with much bigger inflation rate rises directly ahead.

Inflation will climb yet higher in January, as an increase in VAT to 20% from 17.5% takes effect.

Oil prices are fast approaching $100 a barrel, far higher than the BoE assumed in its November Inflation Report, while wheat, rice, meat and cotton prices are shooting upwards.

The bourgeoisie is terrified that workers facing wage cuts, wage freezes and mass sackings will decide that they have nothing to lose and have no alternative but to fight.

The bourgeoisie is readying itself for this situation and is now advocating rate rises to build up unemployment further, to force down wages – along with more anti-union laws to try to chain up the working class and prevent it from taking action.

That rate rises will mean millions being at risk of losing their homes, is being dealt with in the usual cynical fashion, by bankers and others saying that the time has arrived to look after savers not those who took big risks in the housing market.

The fact of the matter is that life is being made unbearable for the working class and the middle class in the UK, with class tensions rising to explosion point, an explosion that will put anything that has happened in Tunisia into the shade.

The trade unions must have a very simple and direct programme.

It is ‘no sackings’, and wage rises that correspond to the real rate of inflation as calculated by a trade union cost of living index.

Not a single family must lose their home, while the trade unions must be mobilised for a general strike to bring down the coalition and bring in socialism.

The only way out of the crisis for the working class and the middle class is through putting an end to capitalism with a socialist revolution.