Public sector pay rises ‘will not drive UK inflation’
Former BoE deputy governor says wage agreements’ impact on private sector prices is likely to be limited
Public sector pay settlements in the UK are unlikely to drive higher inflation, a former deputy governor of the Bank of England (BoE) tells Central Banking.
Sir John Gieve says public sector pay rises “don’t automatically feed through into inflation because most public services are free. And even where they are not – like rail – the government can choose to increase subsidy rather than put up prices”.
The Labour government, which came to power last month, is under pressure to end a series of pay
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