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Rishi Sunak’s take on pay rises as UK professionals suffer due to inflation

Rishi Sunak's comments came after the Bank of England Governor Andrew Bailey expressed concerns that pay increases were fuelling inflation

United Kingdom Prime Minister Rishi Sunak said that pay rises should be “sustainable” and come as rewards for productivity, a comment which may risk him from earning criticism from trade unions, amid the ongoing inflation and the cost of living crisis.

The United Kingdom PM made the above remark in an interview with ITV News, while stating that it was not for his government to intervene in pay talks between companies and employees, when asked if Rishi Sunak would like to see employers showing “more moderation” in relation to pay rises.

He added, “As a general rule, we need pay rises that over time are sustainable and that means pay rises that are focused on rewarding productivity increases. That’s just a kind of ordinary. That’s what people would expect, that as we improve our productivity, pay can rise greater – that’s what I want to see, I want people to be paid more, but that means we have to have a growing economy where productivity is rising.”

Rishi Sunak’s comments came after the Bank of England governor Andrew Bailey expressed concerns that pay increases were fuelling inflation. Office for National Statistics (ONS) latest data also showed that total pay, including bonuses, rose by 8.2% a year in the three months to June 2023, stronger than the 7.3% analysts expected.

Regular pay, which excludes bonus payments, rose by 7.8% in the same quarter, the highest regular annual growth rate since comparable records began in 2001, up from 7.5% in March-May.

The Bank of England is reportedly now under pressure to raise interest rates in September 2023 after wages jumped more than expected in June, boosted by a one-off payment to National Health Service (NHS) workers.

However, amid the ongoing inflation and rising interest rates, trade unions have expressed anger with the ‘apparent blame’ attached by Bailey and others to wage demands by low and middle-income earners.

The Trades Union Congress (TUC) general secretary, Paul Nowak, remarked, “Real wages are still worth less today than in 2008 after the longest pay squeeze in 200 years. And at the same time, unemployment and insecure work are shooting up.”

A 2023 June analysis by the TUC also found out that pay rises for the top 10% of earners in the United Kingdom had clearly outstripped the rest of the workforce and had been a prime driver of recent inflation and interest rates.

Rishi Sunak also trumpeted that the public sector pay offers, which his government had recently extended to NHS workers, teachers and others, the Prime Minister called for an end to industrial strike action by doctors.

“The government has accepted what I believe is a very fair and reasonable offer where typical junior doctors’ salaries or pay is going up by around 9%,” he said further.

A four-day walkout by junior doctors in England, their fifth so far in an ongoing dispute over pay, drew to a close in August 2023. The British Medical Association (BMA) has been asking for a 35% pay rise to restore pay to 2008 levels after a series of below-inflation pay rises.

BMA also claims that the junior doctors are getting paid less than a cafe server. The Rishi Sunak government, while countering the claim, dubbed the statement as a ‘misleading’ one and said that junior doctors are paid between GBP 20 to GBP 30 per hour.

In the UK, junior doctor refers to a wide range of doctors, from fresh graduates from medical colleges to doctors with years of experience. Their salaries also vary accordingly. Their salaries vary according to experience, grades, and skills.

Consultants, who have said they want to see pay rises that at least match inflation, will strike on 19 and 20 September.

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