Inflation Up To 5.2%

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inflation hit 5.2% in September, the highest rate since 1992, rising from 4.7% in August, according to the government’s Consumer Price Index (CPI) figures which were issued yesterday.

The Retail Price Index (RPI) figure, which is used to work out benefits and state pensions for the coming year, reached 5% from 4.8% a month earlier.

But inflation for families is much higher, as revealed in the annual rate of inflation figures for energy and other household bills, which reached 15% – the highest since 1989 – according to the Office for National Statistics.

In response, Dave Prentis, General Secretary of UNISON, said: ‘Care workers, nurses, teaching assistants and road sweepers don’t have to see the latest inflation figures to know that costs have risen at an unprecedented rate. . . .

‘The latest increase in inflation strengthens the case to reopen the NHS pay deal for 2008/09 – 2.54% would leave health workers with a pay cut for next year.

‘Local government workers are also looking for a fair deal as they take their case to arbitration.’

Tony Woodley, joint general secretary of Unite said: ‘Much of the blame for this latest jump in the cost of living sits firmly at the door of the greedy energy companies. . . .

‘Energy windfall profits should be redirected to give six million homes an immediate £250 each this winter to pay for essentials like heating.’

He added: ‘But we also need action now to address the poverty pay of millions of workers in this country, including public sector workers who are facing a wage cut this year. . . .

‘This is where we need government to continue to show decisive leadership and social fairness.

‘It should abandon efforts to hold down public sector pay and concentrate instead on tackling the real drivers of inflation, and top of that list must be the greedy oil and fuel companies.’

GMB General Secretary Paul Kenny said: ‘This will inevitably increase pressure for higher wage rises.’

Asked if the GMB was calling for this year’s below-inflation pay settlements to be reopened, the GMB spokesman refused to respond.

TUC General Secretary Brendan Barber commented: ‘Today’s inflation figures will surprise no-one but this could well be their peak, with oil prices falling and no real domestic inflationary pressure.

‘The real challenge is now recession, not inflation. Last week’s interest rate cuts were a welcome start, but we still need aggressive cuts in interest rates to underpin the Government’s financial package.’

Asked if this year’s below-inflation pay settlements should be reopened, the TUC spokesman replied: ‘That’s for the groups who made those settlements to comment on.’

Asked if he agreed with UNISON that the case was strengthened to reopen the NHS pay deal, he refused to comment, replying: ‘That is for unison’.

Asked if the TUC agrees with the government that below-inflation pay rises are needed to ward off recession, the TUC spokesman replied: ‘We’ve made our comment and have nothing to add to it.’

Reacting to the RPI figures which show inflation at 5.0%, which means the Basic State Pension will rise by £4.54 for single pensioners and £7.26 for pensioner couples, Mervyn Kohler, Special Adviser for Help the Aged, said: ‘The increase in the full Basic State Pension for next year, based on today’s new inflation rate, is going to be much too little, much too late for millions of pensioners.’