Inflation is rising not—as the Tories and the media will tell—going down. Chancellor Jeremy Hunt breathed a sigh of relief on Wednesday when official figures showed that his preferred CPI rate had fallen slightly.
But, missed by much of the media, the more accurate RPI rate showed inflation is heading up again. That means workers have to redouble the fight to win double-digit pay rises.
The CPI index of prices rose by 6.7 percent, down from 6.8 percent in July. But the RPI index was up to 9.1 percent from 9 percent. And as always, it’s important to remember that falling inflation does not mean prices are going down. They are just going up more slowly.
The fall in CPI followed cheaper hotel stays and air travel. These are hardly major items for workers and people on benefits and pensions. More importantly, food prices are still going up by 13.6 percent a year.
Residential rents across Britain are rising at their fastest pace on record, as landlords protect their profits from increased interest rates by passing the cost on to tenants. And more expensive mortgages make it harder for people to buy a home, so they turn to renting. More people chasing scarce accommodation means landlords have another chance to put up prices.
Data from estate and letting agent Hamptons this week showed that the average rent on a newly-let property has jumped by 12 percent in the year to August. That’s the fastest since its index began in 2014.
This pushed the average monthly rent on a newly-let home in August to £1,304, less than a year after it hit £1,200 for the first time.
The number of households becoming homeless because of landlords selling up or raising rent jumped 27 percent from the previous year in the first quarter of 2023. “No fault” bailiff evictions under Section 21 of the Housing Act also rocketed 41 percent during the same period. This sees tenants forcibly ejected despite not breaching their tenancies.
Yet on Thursday, the Bank of England is expected to raise interest rates again—for the 15th time in a row as it “battles inflation”. Its strategy is to crash the economy and scare workers out of demanding higher wages.
Rocketing interest rates mean bankruptcies and job losses—that’s the deliberate calculation by the government.
Unemployment is already up from 3.6 percent to 4.3 percent over the past year. That equates to around a quarter of a million more people out of work. Around two-thirds of this increase was accounted for by workers aged 18-24.
There is a long-term assault on wages. In the fifteen years since January 2008, real weekly wages have fallen by £15. If real wages had instead grown at the average pre-2008 rate over this time, they’d now be £900 per week.
That’s £283 higher than they actually are. Workers should not let up at all in the battle for real wage increases.Original post