Socialist Worker

How inflation is eating into your wages

Issue No. 2124

Figures released last week showed that inflation hit a 16-year high in September.

The Consumer Prices Index (CPI), which is the government's preferred measure, was at 5.2 percent. A year ago it stood at just 1.8 percent.

In particular, the rise reflects the soaring cost of gas and electricity bills. Over the last year, electricity has gone up by 30.3 percent, while gas has risen by almost 50 percent.

Other rising costs include food, where prices have risen by more than 14 percent.

The Retail Prices Index (RPI), which reached 5 percent last month, is increasing more slowly because the measure includes mortgage interest rates. These have been rising at a slower pace in recent months.

With average pay settlements well below both measures of inflation this year, the new figures highlight the way working people are already paying for the economic crisis.

This should be a marker to our union leaders on the need for a renewed fight against 'pay rises' that are in fact pay cuts.

Click here to subscribe to our daily morning email newsletter 'Breakfast in red'

Article information

Tue 21 Oct 2008, 19:30 BST
Issue No. 2124
Share this article

Mobile users! Don't forget to add Socialist Worker to your home screen.