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Strikes are hitting UK economy, admits Jeremy Hunt Pay rises above inflation would be a terrible mistake, says Hunt
(32 minutes later)
The chancellor has said public sector strikes are hitting the economy, but argued inflation-fuelling pay rises would have a "more damaging" impact. The chancellor has said it would be a "terrible mistake" to give pay rises above the rate of inflation, even though strikes are hitting the economy.
Jeremy Hunt said the impact of the junior doctors' strike on NHS patients was "incredibly regrettable". Jeremy Hunt said the impact of the junior doctors' strike on NHS patients was "regrettable".
But he said there would be more damage to economic growth "if we're going to try to solve these strikes with pay awards that fuel core inflation". But wage increases that fuelled inflation would have a "more damaging" impact on the UK economy, he said.
Official figures have revealed the economy was hit by strikes in February. Junior doctors are calling for a 35% pay rise, to make up for 15 years of below-inflation wage rises.
There has been no breakthrough in the latest public sector strike involving junior doctors, who are calling for a 35% pay increase, which they say can make up for 15 years of below-inflation wages. There has been no breakthrough in the latest public sector strike. The government has said that junior doctors' pay demands are "unreasonable" and that talks can only happen if the BMA union moves "significantly" away from their current position.
The government has said that proposition is "unreasonable" and that talks can only happen if the BMA union moves "significantly" away from this.
Speaking on the sidelines of the International Monetary Fund (IMF) Spring meetings, Mr Hunt said agreeing pay awards that don't fuel inflation was an "incredibly difficult balancing act that we have to get right".
Currently, inflation in the UK, which is the rate prices rise at, is near a 40-year high. Prices in February were 10.4% higher than they were in the same month a year before.
Why no breakthrough in the junior doctors' strike?Why no breakthrough in the junior doctors' strike?
Mr Hunt told the BBC that if the government stuck to its plans, "we will get inflation down to below 3%, by the end of the year, we'll be able to put this high inflation period behind us". Speaking on the sidelines of the International Monetary Fund (IMF) spring meetings in Washington DC, Mr Hunt said agreeing pay awards without making inflation worse was an "incredibly difficult balancing act that we have to get right".
Inflation, which is the rate prices rise at, is currently near a 40-year high in the UK. Prices in February were 10.4% higher than they were in the same month a year earlier.
That has prompted workers in many sectors to call for higher wages, bringing a wave of strikes. Official figures revealed industrial action held back economic growth in February.
But Mr Hunt told the BBC the government's aim was to "put this high inflation period behind us".
He said if the government stuck to its plans inflation could be brought below 3% by the end of the year.
"The worst possible thing that we can do for junior doctors, nurses, train drivers, teachers is to manage the economy in a way that they are still worried about 10% cost of living increases, in a year's time," he added."The worst possible thing that we can do for junior doctors, nurses, train drivers, teachers is to manage the economy in a way that they are still worried about 10% cost of living increases, in a year's time," he added.
Though the government has pledged to cut inflation, many economists have said that inflation is due to fall naturally in the coming months, as a result of energy prices falling.When asked about the junior doctors' pay demands, the chancellor pointed out that when nurses, who started out asking for a 19% rise, publicly committed to a much lower number "that became the basis of a fruitful discussion". Following an IMF forecast which stated the UK is set to be one of the worst performing major economies in the world this year, Mr Hunt hit back, saying that the IMF "have undershot on the British economy for quite a long time". Though the government has pledged to cut inflation, many economists have said that inflation is due to fall naturally in the coming months, as a result of energy prices falling.When asked about the junior doctors' pay demands, the chancellor pointed out that when nurses, who started out asking for a 19% rise, publicly committed to a much lower number "that became the basis of a fruitful discussion".
"I think every year since 2016, bar one has undershot but I think they're just one of a number of forecasters. The impression I get is that, you know, in fact, they've been very public about it, is that they believe the British economy is on the right track. They warmly welcome the Budget."Other G7 finance ministers warmly welcomed what they called a remarkable change in tone and engagement from the UK, from the last set of IMF meetings, which occurred in the middle of the mini-Budget crisis, under previous chancellor Kwasi Kwarteng. Following an IMF forecast which forecast the UK would be one of the worst performing major economies in the world this year, Mr Hunt hit back, saying that the IMF had "undershot on the British economy for quite a long time".
The IMF now believed the British economy was "on the right track", he added, and had praised his recent Budget.
Other G7 finance ministers at the Washington gathering warmly welcomed what they saw as a remarkable change in tone and engagement from the UK, from the last set of IMF meetings, which occurred in the middle of the mini-Budget crisis, under the previous chancellor Kwasi Kwarteng.
Related TopicsRelated Topics
International Monetary Fund (IMF)International Monetary Fund (IMF)
UK economyUK economy
Jeremy HuntJeremy Hunt