The argument about public sector wages fuelling inflation has never been very convincing to me. The primary mechanism for the wage-price spiral (to the extent it exists) is wages as an input cost of production driving higher final prices for goods and services. By definition there's no "output" even being sold by the public sector.
The consumption leg is an alternative channel but you'd think it's much weaker (not least because we import so much).
There was someone on Radio 4 from the bank of England saying just about the same thing. The government mouthpieces trooped out today have been ignoring / trashing him all day.
I would have thought someone from the Bank of England would have been on the money...
The argument about public sector wages fuelling inflation has never been very convincing to me. The primary mechanism for the wage-price spiral (to the extent it exists) is wages as an input cost of production driving higher final prices for goods and services. By definition there's no "output" even being sold by the public sector.
The consumption leg is an alternative channel but you'd think it's much weaker (not least because we import so much).