Commenting on inflation figures released today, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:
“With prices now running far in excess of pay deals, the living standards of Scotland’s workers are being seriously undermined. For those surviving on benefits, the situation is even worse. “However, with unemployment high and the recovery weakening, it is essential that the Monetary Policy Committee holds its nerve and keep rates at their current level.
“Higher inflation is the result of a number of temporary factors such as the rising cost of imports and commodities. The VAT rise will also contribute to higher inflation in the months ahead. Increasing interest rates will have little or no impact on these factors but is potentially disastrous for growth and jobs.
“The Chancellor must reconsider the VAT increase in the 2011 Budget and the Prime Minister must be far more judicious in his interventions on inflation. The last thing the MPC needs is for the Prime Minister to be adding to questions about their credibility”.
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