UK:THE CONSERVATIVES and Liberal Democrats attacked Gordon Brown's record as chancellor yesterday as the UK inflation rate jumped to an 11-year high and reduced hopes of any early cut in interest rates, writes Frank Millar.
At the same time, however, Tory leader David Cameron reflected widespread fear about falling growth and possible recession when admitting he could only "hope" a Conservative government would not have to raise taxes to safeguard the public finances.
While Labour has been battling hard to hold Glasgow East in next week's byelection, soaring food and fuel costs pushed UK inflation up to 3.8 per cent in June, while the retail prices index - often used to determine pay negotiations - rose to 4.6 per cent in the same month. Food and non-alcoholic drinks were the main factors fuelling the inflation rise, with prices increasing by 9.5 per cent last month compared to a year ago.
Ahead of today's pay strike by local authority workers in England, Wales and Northern Ireland, meanwhile, chancellor Alistair Darling has again urged wage restraint to help keep inflation under control.
As a row erupted over employer claims that fewer than one quarter of some 600,000 council staff would actually take industrial action, Mr Darling warned against repeating past experience "when inflation got out of control and people found that every penny they got in a wage increase was swallowed up by food and fuel prices going up".
As Bank of England governor Mervyn King won plaudits for declining a £100,000 (€125,290) pay rise, Mr Darling said: "Whether you are in the private sector or public sector, whether you are sitting in the boardroom or working on the shop floor, we cannot allow inflationary wage increases because that would mean that everyone, especially people on lower incomes, would suffer."
Dave Prentis, general secretary of Unison, insisted his members could not afford another pay cut "which is what [ the rejected increase of] 2.45 per cent means". Civil servants and coast guards, driving test examiners, home and land registry staff and employees of the identity and passport service will be among those involved in a series of strikes over the next 10 days.
Mark Serwotka of the Public and Commercial Services union predicted this would be "a week of solidarity among public sector workers facing a brutal attack on their living standards from a government desperate to cling to a widely discredited pay policy". However, the Local Government Association claimed a survey of councils suggested less than a quarter of workers would be taking part in strike action, while insisting: "Strikes will not change the fact that our last offer was our final offer."
Meanwhile, a charity report out this morning claims that poorer families in Britain are forced to pay £1,000 (€1,253) a year more for energy bills and financial services because they are excluded from deals available to those on higher incomes.
New Philanthropy Capital says financial exclusion exacerbates poverty by denying poorer families discounts available from low-cost borrowing and payments by direct debit, often forcing them into the arms of door-to-door moneylenders.
Author Simon Blake says: "Being unable to borrow at reasonable rates can make it very difficult to escape from poverty.
"Expensive credit swallows up cash, so instead of spending money on basic things they need, like food and clothes, people end up putting it all into loan payments. As the credit crunch begins to bite, we should be focusing on those that are hit the hardest."