Rishi Sunak says public sector pay rises will fuel inflation. Economists say they won’t
Rishi Sunak has said he cannot raise public sector wages because doing so will fuel inflation.
The government has warned of a “wage-price spiral”, also known as wage-push inflation, in which prices rise (inflation) due to higher wages which, in turn, increase prices in a perpetual loop.
As more workers go on strike this month demanding their pay matches or beats inflation – which stands at 10.7% – two economics experts have told Sky News the government is not correct in its assessment.
They agreed increasing public sector wages would not push up inflation.
Dr Ethan Ilzetzki
Associate professor of economics, London School of Economics
“It’s very wrong-minded of the government to approach it in this way,” Dr Ilzetzki said.
“Private sector wages do feed into inflation – wages increase, costs increase and they want to pass that on to the consumer.
“So private sector wages are more likely to lead to inflation or a wage-price spiral but there’s no similar way that the public sector could cause inflation.
“The caveat is, of course, an increase in public expenditure could lead to inflation and public wages are one way public expenditure is increased, but the government could increase wages and cut other parts of the budget.”
He said the conflict between the government and public sector workers is essentially political and about “who burdens the cost”.
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The Bank of England’s job is to keep inflation close to 2%, he added, so “the first order of business is to bring inflation down” to that figure.
“The Bank of England always has the ability to bring inflation down, even if its caused by global energy prices or geopolitical conflict,” Dr Ilzetzki said.
“That does have a cost: the further slowing down of the economy which has already plummeted, so the Bank of England does have an unenviable task but it has a very clear mandate to keep prices at a constant level.”
He added that the friction between the unions and the government is “about taking responsibility for economic problems” that politicians “need to address”.
Professor Alex Bryson
Professor of quantitative social science, University College London
“The government’s concern with wage-push inflation is misconceived as they’re missing much of the bigger picture: unemployment and shrinking of the size of the economy,” Prof Bryson said.
“Past periods of recession inflation were often followed by deflation – this happened in 2008.
“But this episode is different, the chief reason [for inflation rising] was not wage-push but COVID-induced restraints, which hike prices but will die back over time, as well as energy prices and ongoing uncertainty over Ukraine.”
Professor Alex Bryson said the government is missing the bigger picture
He said unemployment rates have been low for a long time and wages have been relatively stagnant, which has meant workers’ arguing power is “not so great”.
“There are more benefits for the government paying public sector workers more than not, it’s conceivable they could benefit from an increased low turnover, which would cost the public less than it does now,” he said.
“Even a substantial pay rise will not see public sector workers catching up on the pay gap with the private sector that has been widening since 2010.”
Prof Bryson said he thinks the UK is already in recession and it will be “long and deep”.
“We’re seeing a deeper recession than is currently identified, we saw that before with the great recession of 2008 so you would expect that would normally mean a spike in unemployment,” he said.
“Surveys in recent months show an increased proportion of indexes in the labour market saying unemployment will rise in the next 12 months.
“That will mean GDP is lower than it currently is which will mean inflation will start to fall.”
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Pay rise ‘not affordable’: PM on nurses’ strike
He added that at the moment, the government should be more worried about high non-employment – those not in work and not seeking work – and underemployment – those who want to work more hours but do not have the opportunity to.
“Their focus should be on reducing the rate at which real wages are falling,” Prof Bryson said.
“It’s not clear to me whether the government will be able to hold their line on wage-push inflation, especially if the unions are holding out as they seem to be.”
World
Terror group supporters posted on TikTok, YouTube and Google from site targeted in Indian airstrikes
Social media accounts expressing support for a Pakistan-based terror group linked to al Qaeda appear to have posted recent videos from a Pakistan mosque targeted by Indian airstrikes.
Sky News has found videos posted on TikTok, YouTube and Google that appear to be filmed at the Markaz Taiba Mosque in Muridke. The captions and usernames contain expressions of support for the Lashkar-e-Taiba (LeT) and a group called ‘313’.
Sky News has found and geolocated multiple videos that appear to be filmed in the area where the captions include either or both ‘313’ and LeT.
Some of the videos show men in the streets with guns. Another post captioned a video of children doing martial arts training inside the targeted mosque, “we are little soldiers, and we fight the non-believers”.
The caption of the video reads ‘we are little soldiers, and we fight the non-believers’. It uses the hashtag ‘313’.
The caption uses the hashtag #جہاد313, which translates to ‘313’ jihad.
‘313’ appears to refer to the 313 Brigade, a proscribed terror organisation in Pakistan.
In a TikTok video posted to the Google page for Markaz Taiba Mosque in Muridke, a man can be seen walking along the street with a gun.
The account that posted that video wrote in their description, “Lashkar Taiba, Mujahid Force, ‘313’ and Markaz Taiba Muridke”, self-proclaiming their support for the groups.
This screenshot from the Google user labels Lashkar-e-Taiba and ‘313’ and includes the location name Muridke
India’s retaliatory strikes on Pakistani-adminstered Kashmir and Pakistan on 7 May came after a deadly attack in Indian-administered Kashmir last month.
Gunmen opened fire on tourists, killing 26 people and injuring dozens in a popular holiday spot near Pahalgam, Kashmir, on 22 April.
LeT were accused by India of involvement in the Pahalgam attack through their proxy the Resistance Front, which claimed responsibility for the attack.
LeT, which is designated as a terrorist organisation by the UN Security Council and the UK, focuses on fighting Indian control in Kashmir and is based in the Punjab region of Pakistan.
Pakistan denies allegations of terror camps operating in the country. This region has been in the control of the Punjabi government since 2010. The Punjab government condemned the Indian strikes, and declared a state of emergency across Punjab.
Muskan Sangwan, senior intelligence analyst at TRAC, a terrorism research and analysis consortium, told Sky News: “Brigade 313 is al Qaeda in Pakistan. It’s an umbrella organisation for members of several groups like Taliban, Lashkar-e-Jhangvi, Haqqat ul-Jihad-al-Islami, Jaish-e Muhammad, Lashkar-e-Taiba, and Jundullah.”
Ms Sangwan explained that ‘313’ refers to the number of companions said to have fought with the Prophet Mohammed in the Battle of Badr.
TRAC have seen a recent uptick in TikTok videos and other social media posts that refer to ‘313’.
Many of the accounts are linked to each other.
Ms Sangwan said: “They [the TikTok users] mostly use ‘313’ as a hashtag… trying to push that hashtag to as many people it can reach on social media.”
Sky News sought to verify the location by comparing before and after videos from the strike location, and using the video released by the Indian army conducting the strike.
One video showing damage at the strike location was posted by a user with 313 in their TikTok username.
The TikTok account that posted video footage of the destruction in Muridke has 313 in the username
Below is satellite imagery that shows the destruction of the site.
Satellite imagery shows Markaz Taiba Mosque after the strike on 7 May. Credit: Maxar
In one TikTok, the video is captioned “bring your arms and ammunition and go to war”. The text on the screen of the TikTok is ‘313’ and he is carrying a gun.
The group are comfortable with having an online presence. On the Google tag for Markaz Taiba Mosque in Muridke, men pose for a group photo. Almost all the people in the photo have used ‘313’ on TikTok.
Ms Sangwan explained: “With these people from Muridke, pushing this propaganda on social media would generate a lot of significance in terms of recruitment and in terms of gaining support from local people and from other people.”
Sky News’ Asia correspondent Cordelia Lynch has reported on the ground in Muridke.
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Anger in Pakistan after India strikes
India says it struck Markaz Taiba, a site in Muridke about 15 miles (25km) from the border, which has long been claimed to be a terrorist training site associated with LeT.
MEMRI, a US-based research group that monitors terrorist threats, told Sky News: “It has been known for decades that Lashkar-e-Taiba has its headquarters in Muridke.”
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Sky News contacted the Pakistan Ministry of Defence for comment. Khawaja Asif, Pakistan’s defence minister, told Sky News: “This appears to be a random video with background music added later – consistent with how TikTok trends often function. If this is to be considered credible evidence, we could produce millions of similar clips ourselves.”
Mr Asif also said that any suggestion that the mosque was used as a base by terrorists was a “completely false, social media made up hoax”.
On 7 May, after the strikes in Pakistan, the Indian subcontinent branch of al Qaeda issued a statement condemning India’s actions and encouraging its supporters to wage jihad against India.
The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.
European leaders including Sir Keir Starmer have threatened Vladimir Putin with fresh sanctions if Russia fails to comply with an unconditional 30-day ceasefire.
The prime minister met Ukrainian President Volodymyr Zelenskyy alongside French President Emmanuel Macron, recently-elected German Chancellor Friedrich Merz and Polish Prime Minister Donald Tusk in Kyiv on Saturday.
It is the first time the leaders of the four countries have travelled to Ukraine – arriving by train – at the same time.
They updated Donald Trump on the progress made on the so-called “coalition of the willing” plans in a 20-minute phone call.
European leaders including Volodymyr Zelenskyy hold call with Donald Trump. Pic: Number 10
Following the summit, the leaders announced an agreement that there should be an unconditional 30-day ceasefire starting on Monday, with the backing of the US president.
“All of us here, together with US, are calling Putin out,” said Sir Keir.
“So we are clear, all five leaders here – all the leaders of the meeting we just had with the coalition of the willing – an unconditional ceasefire, rejecting Putin’s conditions, and clear that if he turns his back on peace, we will respond.
“Working with President Trump, with all our partners, we will ramp up sanctions and increase our military aid for Ukraine’s defence to pressure Russia back to the table.”
Sir Keir Starmer, Emmanuel Macron and Friedrich Merz travelling in the saloon car of a special train to Kyiv. Pic: Reuters
Leaders arrive in Kyiv by train. Pic: PA
It comes after Donald Trump called for “ideally” a 30-day ceasefire between Kyiv and Moscow, and warned that if any pause in the fighting is not respected “the US and its partners will impose further sanctions”.
Security and defence analyst Michael Clarke told Sky News presenter Samantha Washington the European leaders are “rowing in behind” the US president, who referred to his “European allies” for the first time in this context in a post on his Truth Social platform.
“So this meeting is all about heaping pressure on the Russians to go along with the American proposal,” he said.
“It’s the closest the Europeans and the US have been for about three months on this issue.”
Trump calls for ceasefire. Pic: Truth Social
Mr Zelenskyy told reporters the agreed ceasefire should cover air, sea and land, and said that if Moscow refused, Russia would face new sanctions, including the strengthening of punitive measures targeting its energy and banking sectors.
The European leaders said the terms of a peace deal would be negotiated during the 30-day pause in fighting.
But the Ukrainian president said: “We have no illusions that the ceasefire will be breached.”
Mr Macron said the proposed ceasefire would be monitored mainly by the US and European countries and there would be “massive” sanctions if Russia did not agree.
Sir Keir and Volodymyr Zelenskyy during a meeting in March. Pic: AP
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Putin’s Victory Day parade explained
Military officers from around 30 countries have been involved in drawing up plans for a coalition, which would provide a peacekeeping force in the event of a ceasefire being agreed between Russia and Ukraine.
This force “would help regenerate Ukraine’s armed forces after any peace deal and strengthen confidence in any future peace”, according to Number 10.
Kremlin spokesman Dmitry Peskov was quoted as saying on Friday that Russia supported the implementation of a 30-day ceasefire, but only with due consideration of “nuances”.
European leaders show solidarity – but await Trump’s backing
The hope is Russia’s unilateral ceasefire, such as it’s worth, can be extended for a month to give peace a chance.
But ahead of the meeting, Ukrainian sources told Sky News they are still waiting for President Donald Trump to put his full weight behind the idea.
The US leader has said a 30-day ceasefire would be ideal, but has shown no willingness yet for putting pressure on Russian president Vladimir Putin to agree.
The Russians say a ceasefire can only come after a peace deal can be reached.
European allies are still putting their hopes in a negotiated end to the war despite Moscow’s intransigence and President Trump’s apparent one-sided approach favouring Russia.
Ukrainians would prefer to be given enough economic and military support to secure victory.
But in over three years, despite its massive economic superiority to Russia and its access to more advanced military technology, Europe has not found the political will to give Kyiv the means to win.
Until they do, Vladimir Putin may decide it is still worth pursuing this war despite its massive cost in men and materiel on both sides.
As the European leaders pulled into Kyiv by train on Saturday, the screen on the platform announced the arrival of the “Bravery Express”.
Read more:
Russia’s VE Day parade felt like celebration of war
Michael Clarke Q&A on Ukraine war
Ukraine and Russia accuse each other of breaching ceasefire
Mr Zelenskyy accompanied them as they paid their respects at a memorial in central Kyiv to honour Ukrainian soldiers killed in the current war.
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The visit came on the final day of a three-day ceasefire unilaterally declared by Mr Putin, which was denounced as a sham by Ukraine.
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Both sides have accused each other of violating it.
Social media accounts expressing support for a Pakistan-based terror group linked to al Qaeda appear to have posted recent videos from a Pakistan mosque targeted by Indian airstrikes.
Sky News has found videos posted on TikTok, YouTube and Google that appear to be filmed at the Markaz Taiba Mosque in Muridke. The captions and usernames contain expressions of support for the Lashkar-e-Taiba (LeT) and a group called ‘313’.
Sky News has found and geolocated multiple videos that appear to be filmed in the area where the captions include either or both ‘313’ and LeT.
Some of the videos show men in the streets with guns. Another post captioned a video of children doing martial arts training inside the targeted mosque, “we are little soldiers, and we fight the non-believers”.
The caption of the video reads ‘we are little soldiers, and we fight the non-believers’. It uses the hashtag ‘313’.
The caption uses the hashtag #جہاد313, which translates to ‘313’ jihad.
‘313’ appears to refer to the 313 Brigade, a proscribed terror organisation in Pakistan.
In a TikTok video posted to the Google page for Markaz Taiba Mosque in Muridke, a man can be seen walking along the street with a gun.
The account that posted that video wrote in their description, “Lashkar Taiba, Mujahid Force, ‘313’ and Markaz Taiba Muridke”, self-proclaiming their support for the groups.
This screenshot from the Google user labels Lashkar-e-Taiba and ‘313’ and includes the location name Muridke
India’s retaliatory strikes on Pakistani-adminstered Kashmir and Pakistan on 7 May came after a deadly attack in Indian-administered Kashmir last month.
Gunmen opened fire on tourists, killing 26 people and injuring dozens in a popular holiday spot near Pahalgam, Kashmir, on 22 April.
LeT were accused by India of involvement in the Pahalgam attack through their proxy the Resistance Front, which claimed responsibility for the attack.
LeT, which is designated as a terrorist organisation by the UN Security Council and the UK, focuses on fighting Indian control in Kashmir and is based in the Punjab region of Pakistan.
Pakistan denies allegations of terror camps operating in the country. This region has been in the control of the Punjabi government since 2010. The Punjab government condemned the Indian strikes, and declared a state of emergency across Punjab.
Muskan Sangwan, senior intelligence analyst at TRAC, a terrorism research and analysis consortium, told Sky News: “Brigade 313 is al Qaeda in Pakistan. It’s an umbrella organisation for members of several groups like Taliban, Lashkar-e-Jhangvi, Haqqat ul-Jihad-al-Islami, Jaish-e Muhammad, Lashkar-e-Taiba, and Jundullah.”
Ms Sangwan explained that ‘313’ refers to the number of companions said to have fought with the Prophet Mohammed in the Battle of Badr.
TRAC have seen a recent uptick in TikTok videos and other social media posts that refer to ‘313’.
Many of the accounts are linked to each other.
Ms Sangwan said: “They [the TikTok users] mostly use ‘313’ as a hashtag… trying to push that hashtag to as many people it can reach on social media.”
Sky News sought to verify the location by comparing before and after videos from the strike location, and using the video released by the Indian army conducting the strike.
One video showing damage at the strike location was posted by a user with 313 in their TikTok username.
The TikTok account that posted video footage of the destruction in Muridke has 313 in the username
Below is satellite imagery that shows the destruction of the site.
Satellite imagery shows Markaz Taiba Mosque after the strike on 7 May. Credit: Maxar
In one TikTok, the video is captioned “bring your arms and ammunition and go to war”. The text on the screen of the TikTok is ‘313’ and he is carrying a gun.
The group are comfortable with having an online presence. On the Google tag for Markaz Taiba Mosque in Muridke, men pose for a group photo. Almost all the people in the photo have used ‘313’ on TikTok.
Ms Sangwan explained: “With these people from Muridke, pushing this propaganda on social media would generate a lot of significance in terms of recruitment and in terms of gaining support from local people and from other people.”
Sky News’ Asia correspondent Cordelia Lynch has reported on the ground in Muridke.
Please use Chrome browser for a more accessible video player
Anger in Pakistan after India strikes
India says it struck Markaz Taiba, a site in Muridke about 15 miles (25km) from the border, which has long been claimed to be a terrorist training site associated with LeT.
MEMRI, a US-based research group that monitors terrorist threats, told Sky News: “It has been known for decades that Lashkar-e-Taiba has its headquarters in Muridke.”
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Sky News contacted the Pakistan Ministry of Defence for comment. Khawaja Asif, Pakistan’s defence minister, told Sky News: “This appears to be a random video with background music added later – consistent with how TikTok trends often function. If this is to be considered credible evidence, we could produce millions of similar clips ourselves.”
Mr Asif also said that any suggestion that the mosque was used as a base by terrorists was a “completely false, social media made up hoax”.
On 7 May, after the strikes in Pakistan, the Indian subcontinent branch of al Qaeda issued a statement condemning India’s actions and encouraging its supporters to wage jihad against India.
The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.
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