Economic hit from public sector strikes worth it to tame UK inflation, says Hunt
The government is willing to accept short-term damage to the economy from public sector strikes rather than give in to pay demands and risk a longer-term hit from persistently higher inflation, Jeremy Hunt has insisted.
Speaking in Washington, the chancellor said he “completely understood” public anger at the high cost of living but added that the impact of rising prices would be longer lasting and more damaging if ministers acceded to “hard to justify” pay demands.
Hunt accepted public sector strikes had been a factor in the flatlining of the UK economy in February and said the four-day strike by junior doctors across England this week was “incredibly regrettable”.
The chancellor, who is attending the spring meetings of the International Monetary Fund and World Bank, was speaking after it emerged that Britain recorded zero growth in gross domestic product in February.
A wave of public sector strikes weighed on activity, offsetting a recovery in consumer spending despite the cost of living crisis, according to figures from the Office for National Statistics (ONS) on Thursday.
The impact of strikes meant the economy failed to meet City expectations for a 0.1% month-on-month rise in GDP, the total value added by the production of goods and services across the economy.
Asked what the government was doing to prevent further damage to the economy, Hunt said he was not interested in a “short-term fix” that would entrench inflation.
“We have to get this right. I completely understand how the cost of living going up faster than wages makes people angry,” he said.
“Inflation is the root cause of that anger. We must sure we don’t have the same inflation problems and the same arguments in a year’s time. The worst possible thing for junior
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