The Blubber

According to the Times, the UK government is considering blocking pay increases for millions of public workers due to concerns that such raises could contribute to higher prices, given the high level of inflation in the country.

Prime Minister Rishi Sunak is reportedly willing to disregard the recommendations of independent pay review bodies in order to prevent a "wage-price spiral" from occurring. These bodies have proposed a 6.5% salary increase for teachers in the 2023-24 period, while suggesting that police officers, prison officers, and junior doctors should receive raises of 6% or more. Implementing these pay rises would cost the government over £5 billion ($6.4 billion).

Despite the Bank of England's aggressive campaign to raise interest rates, inflation in the UK is decreasing at a slower rate compared to other developed nations. The central bank recently raised rates to their highest level since 2008 due to persistent inflation that surpassed initial expectations. Market forecasts suggest that further rate hikes may be implemented in the future.

The decision to block pay rises for public workers could lead to increased tensions with unions, as the public sector has already experienced several strikes in the past year, causing disruptions to the National Health Service and public transportation. Junior doctors are planning their longest-ever industrial action with a planned five-day walkout next month.

The Times notes that the government has only gone against the advice of independent bodies on four occasions in the past decade.

In an effort to alleviate the cost-of-living crisis faced by many, the UK government has announced measures to assist homeowners in dealing with soaring mortgage payments. Chancellor of the Exchequer Jeremy Hunt and the country's largest lenders have agreed to provide a 12-month grace period for individuals who miss mortgage payments, as well as the option to switch to interest-only loans or extend loan terms without penalties for specific periods.

Further measures are being developed to alleviate the financial burden on households. Energy Security Secretary Grant Shapps has stated that households will be exempt from an energy bill levy aimed at funding the hydrogen industry, as he favors alternative methods of raising funds for the government's Net Zero initiative.