Boris Johnson has said there is “no alternative” to wage-fuelled inflation and interest rate hikes, as he urged businesses to pay workers more to address the supply chain crisis.
In a series of TV interviews at the Conservative conference in Manchester, the prime minister allayed concerns that wage increases for HGV drivers and other deficient businesses would drive up prices in stores.
His remarks came amid warnings of 1970s-style inflation, driven by labor shortages as a result of the COVID pandemic and the removal of free movement rights from EU citizens after Brexit. Inflation is currently running at 3 per cent and is expected to rise further.
Mr Johnson argues that, after Brexit, the UK is undergoing a “transition” from a low-wage, low-productivity economy dependent on cheap labor from abroad, to a high-wage, high-productivity model in which businesses is forced to make amends. Paying domestic workers and investing in innovation and skills.
ITV’s political editor Robert Peston challenged the prime minister whether his approach risked reducing productivity and fueling inflation, which could result in rising interest rates – and consequently housing costs and the price of lending.
Mr. Johnson replied: “In a famous phrase, there is no choice. There is no choice here.
“The UK can – and we can – do a lot better by becoming a high-wage, high-productivity economy.”
The prime minister’s “no choice” quote came from Tory predecessor Margaret Thatcher, who came to power in 1979, with price increases spiraling out of control by about 15 percent a year, and most of his premiership by reining in wage inflation. Dedicated to bring down the rates. .
In a sharp break from Mrs Thatcher’s point of view, Mr Johnson and other ministers have suggested in recent days that rising wages for workers such as HGV drivers are a benefit of Brexit, and the reopening of doors on cheap migrant labor on business leaders. accused of wanting.
Asked by the BBC whether he was concerned about inflation, Mr Johnson replied: “I believe supply will be in line with demand. That’s what we want to encourage and we want to encourage people to invest in it.”
He said investments in skills and infrastructure would boost productivity and growth and create a “high-wage, high-skill economy”.
And asked on Sky News if the inflation threat worried him, he replied: “People have been worrying about inflation for a very long time. I’m seeing strong economic growth. And by the way, those fears are unfounded. Huh.
“I’m seeing strong economic growth. I think the supply system that we have, the logistics, the supply chain that we have is incredibly smart and strong and the supply will meet the demand.
Credit: www.independent.co.uk /