FINANCE

Inflation threatens council budget planning

The forecasts of 8.7% inflation at the end of the year threaten to dramatically change the public sector pay landscape, while Treasury chief secretary Simon Clarke insists that the Spending Review’s annual increases were the last, says Michael Burton.

There may be a few veterans who remember when annual inflation at 20% was not unusual and pay demands reflected it.

In 1977, firefighters held their first strike after their call for a 30% rise was rejected by the then Labour Government, which two years later was defeated in a General Election after a winter of damaging public sector strikes, again over pay.

Michael Burton

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