Rishi Sunak insists returning triple pension lock won’t fuel inflation Business

Mr Sunak said on Wednesday: “It is right that we reward our hard-working public sector workers with a pay rise, but this must be proportionate and balanced with the need not to add to inflationary pressures, and also to see which is affordable to the taxpayer.

“Now the slight difference with pensions is that pensions are not an entry cost into the cost of producing the goods and services we all consume, so they don’t add to inflation in the same way. “

However, economists have warned that the planned increase in state pensions could further aggravate inflationary pressures hitting British households.

Jonathan Cribb, associate director of the Institute for Fiscal Studies, said: “Anything that is going to put more money in people’s pockets through government by borrowing more, for example, is going to be inflationary.

“They don’t have to do it by borrowing. They could raise taxes and they could use those taxes to pay pensioners more… It would be more neutral.

He added that the inflationary impact would also depend on how the Bank of England reacted to counter these price pressures.

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This notice was published: 2022-06-22 10:54:02

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