Chancellor calls for prudence over pay

News Article - 23 May 2012
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The UK's chancellor of the exchequer has urged Britain's businesses to exercise restraint over pay increases this year in order to keep inflation under control.

Alistair Darling told the BBC that wage increases above the government's inflation target of two per cent could damage the whole UK economy by pushing up prices.

"It's absolutely imperative from the boardroom to the shopfloor, both private and public sector, that we don't allow inflation to take hold again," he declared.

Speaking on the Andrew Marr Show, Mr Darling added that pay awards in both the private and public sectors need to be "consistent" with UK fiscal policy in order to "keep inflation under control" and ensure that wage increases do not simply translate into higher retail prices.

Governor of the Bank of England Mervyn King warned recently that Britain's economy faces a difficult period ahead, but Mr Darling insists that it is in better shape to weather problems than during the 1970s, 1980s and 1990s.

Businesses can use accounts software to monitor their finances, decide on wage increases and identify potential savings.

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