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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 on public sector workers' wages
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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.”

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Hurricane Melissa leaves 28 dead after tearing through Jamaica

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Hurricane Melissa leaves 28 dead after tearing through Jamaica

A total of 28 people have died following Hurricane Melissa’s rampage across Jamaica, the government has confirmed.

Melissa, one of the strongest storms on record to make landfall in the Caribbean, brought with it winds of up to 185mph when it hit the island earlier this week.

The Red Cross described it as a “disaster of unprecedented catastrophe”.

Melissa ravaged through Jamaica, Haiti, the Dominican Republic, and Cuba.

It weakened by the time it reached Cuba on Wednesday morning but still brought devastation – with houses collapsed and roads blocked.

A statement from the government of Jamaica said it was “deeply saddened to confirm 28 fatalities associated with the passage of Hurricane Melissa”.

It went on: “We extend heartfelt condolences to the families, friends, and communities mourning their loved ones.”

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The confirmation came as the first British repatriation flight was setting off from the island on Saturday evening local time.

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The flight, chartered by the Foreign, Commonwealth and Development Office, was for those “unable to leave Jamaica on commercial routes”.

Essential relief supplies are now rolling into some of the hardest hit areas.

Humanitarian aid has arrived and is waiting to be distributed. Pic: AP
Image:
Humanitarian aid has arrived and is waiting to be distributed. Pic: AP

The UK government is mobilising an additional £5m in emergency humanitarian funding – on top of £2.5m announced earlier this week – to support the region’s recovery.

This new funding will enable the UK to send humanitarian supplies – including more than 3,000 shelter kits and over 1,500 solar-powered lanterns to help those whose homes have been damaged and those without power.

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Jamaica victims left shell-shocked

The UK is working with the World Food Programme and Red Cross, to ensure emergency relief reaches those who need it most.

At least 25 people died in the southern Haitian coastal town of Petit-Goave after the La Digue river burst its banks as a result of the hurricane, according to the town’s mayor Jean Bertrand Subreme.

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Ukrainian troops ‘start surrendering’ in key city but Kyiv says situation ‘dynamic’

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Ukrainian troops 'start surrendering' in key city but Kyiv says situation 'dynamic'

Ukrainian soldiers encircled by Russian forces in the key eastern city of Pokrovsk have started surrendering, the defence ministry in Moscow claims.

But Ukraine‘s military has pushed back on the report by the TASS state news agency, saying the situation is “difficult and dynamic”.

Kyiv has also claimed its positions in some districts of Pokrovsk have improved despite its city being infiltrated by Russian troops.

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Ukraine is increasing its number of assault troops in the area, the 7th Rapid Response Corps said on Facebook.

And Ukrainian troops are also working to cut Moscow’s military logistics routes, it added.

The Russian defence ministry also said its forces defeated a team of Ukrainian special forces that headed to Pokrovsk in a bid to prevent Russian forces from advancing further into the city.

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‘Footage of Ukrainian troops after surrendering’

It later posted videos of two Ukrainian troops who, it claimed, had surrendered.

The footage showed the men, one dressed in fatigues and the other in a dark green jacket, sat against a wall in a dark room, as they spoke of fierce fighting and encirclement by Russian forces.

The videos’ authenticity could not be independently verified, and there was no immediate public comment from Kyiv on the Russian ministry’s claims.

Ukrainian police officers on patrol in Pokrovsk. File pic: Reuters
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Ukrainian police officers on patrol in Pokrovsk. File pic: Reuters

Ukraine’s President Volodymyr Zelenskyy has previously acknowledged that some Russian units had infiltrated the city. But he maintained that Ukraine is tackling them.

He said Russia had deployed 170,000 troops in Ukraine’s eastern Donetsk province, where Pokrovsk is located, in a major offensive to capture the city and claim a big battlefield victory.

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Multiple Russian missiles strike Ukraine’s Zaporizhzhia

‘Operation to destroy enemy forces’

Ukraine’s army chief Oleksandr Syrskyi said on Saturday the situation in Pokrovsk remained “hardest” for Ukrainian forces, who were trying to push Russian troops out.

But he insisted there was no encirclement or blockade as Moscow has claimed.

“A comprehensive operation to destroy and push out enemy forces from Pokrovsk is ongoing. The main burden lies on the shoulders of the units of the armed forces of Ukraine, particularly UAV operators and assault units,” Mr Syrskyi said.

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24 hours in the kill zone

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Why is Ukraine attacking Moscow? What’s behind Putin’s nuclear test?

Why is Pokrovsk important?

One of Moscow’s key aims has been to take all of Ukraine’s industrial heartland of coal-rich Donbas, which comprises of the Luhansk and Donetsk provinces. Kyiv still controls about 10% of Donbas.

Capturing Pokrovsk, which Russian media has dubbed “the gateway to Donetsk”, and Kostiantynivka to its northeast, would give Moscow a platform to drive north towards the two biggest remaining Ukrainian-controlled cities in Donetsk – Kramatorsk and Sloviansk.

‘Key Russian fuel pipeline struck’

Meanwhile, Ukraine’s military intelligence, known as HUR, has said its forces have hit an important fuel pipeline in the Moscow region that supplies the Russian army.

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Dramatic drone rescue in Ukraine’s kill zone

In a statement on Telegram, HUR said the operation late on Friday was a “serious blow” to Russia’s military logistics.

HUR said its forces struck the Koltsevoy pipeline, which is 250 miles long and supplies the Russian army with gasoline, diesel and jet fuel from refineries in Ryazan, Nizhny Novgorod and Moscow.

The operation, which targeted infrastructure near Ramensky district, destroyed all three fuel lines, HUR said.

The pipeline was capable of transporting up to three million tonnes of jet fuel, 2.8 million tonnes of diesel and 1.6 million tonnes of gasoline annually, HUR said.

Russia ‘targets gas production site’

Also overnight, Russia launched an attack on a gas production site in Poltava, in central Ukraine.

A fire broke out, the local administration said, but no injuries were reported.

Kyiv condemns ‘nuclear terrorism’

Ukraine’s foreign ministry has condemned Russian strikes this week on substations powering some of its nuclear plants.

It accused Russia of carrying out “targeted strikes on such substations” which “bear the hallmarks of nuclear terrorism”.

Elsewhere, a civilian died and 15 more were injured on Saturday morning after Russia struck the Mykolaiv region in southern Ukraine with a ballistic Iskander missile, local official Vitaliy Kim said.

A child was among those hurt in the strike, he added.

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‘We have no food, no water… it feels like the wilderness’: The communities shredded and still stranded by Hurricane Melissa

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'We have no food, no water... it feels like the wilderness': The communities shredded and still stranded by Hurricane Melissa

The death toll in Jamaica after Hurricane Melissa could rise, with certain communities still marooned from the rest of the island, according to the police chief for the worst-affected area. 

Coleridge Minto, superintendent of police for St Elizabeth Parish, told Sky News that his area has recorded six deaths directly related to the hurricane.

“We are hoping there is no more,” he said. “The reality is we have not yet communicated with all our station commanders in some of the other areas and so as soon as we have those reports, we could be hearing of other injuries, other situations that we were not privy to at this moment.”

The UK has pledged a total of £7.5m to assist the Caribbean’s recovery from the hurricane. Aid flights have been arriving over the past couple of days into Jamaica’s two international airports, but it’s not getting to where they need it the most.

Black River has been described as ground zero after Hurricane Melissa swept through it
Image:
Black River has been described as ground zero after Hurricane Melissa swept through it

In the town of Middle Quarters, close to where the hurricane made landfall, Vivienne Bennett is sitting, propped up against a house without a roof. Her right hand is wrapped in a kitchen towel. “I lost my finger in the hurricane,” she says, showing me her finger which is exposed to the bone. “I opened the door of my house to try and escape, and the wind slammed it back and cut my finger off.”

She asks me for painkillers and says she doesn’t have any medication to stave off infection. I ask if she has seen any government aid. “No,” she replies, “we haven’t seen anybody yet, so we’re trying to get some help. I need to get to a hospital but I don’t know how because all the roads are blocked.”

The situation is growing more dire by the day
Image:
The situation is growing more dire by the day

Her daughter, Leila, has a baby and other children are playing nearby. “We have no nappies, we have no food, we have no water,” Leila says, “it feels like the wilderness here now.”

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The road leading to Black River, the town authorities are referring to as “ground zero” for this disaster, is difficult to pass, but not impossible. A journey from the capital, Kingston, that would usually take two hours, now takes six. We drive through murky floodwater, a couple of feet deep, and through an avenue of twisted bamboo stalks.

On arrival, it’s a desperate scene. People here seem almost shell-shocked, still processing what has happened to them, unsure what to do next. One man walks past our cameraman and holds his hands in the air. “Jamaica needs help,” he says, “it’s been mashed up.” I ask what help he needs. “We need houses, food and water,” he replies.

Black River was once a wealthy town, the first in Jamaica to have electricity. But the storm has laid waste to the main street. The 300-year-old church, the seafront restaurant, the pharmacy, the Chinese supermarket, the whole town has been shredded.

A group of people sit at a bus stop on the seafront surrounded by huge rocks washed up by a 16-foot storm surge. “It’s a disaster, a disaster,” one woman calls out to me.

With communications still down across most of the island, people here have been unable to contact friends and family for five days now.

Black River has been described as ground zero after Hurricane Melissa swept through it
Image:
Black River has been described as ground zero after Hurricane Melissa swept through it

A woman called Inkiru Bernard, who is Jamaican but lives in New York, has been in touch with our team and asked us to try to find her 67-year-old mother, who lives in Black River. She’s not heard from her since the storm.

When we arrive at the address she provides, her mother, Inez McRae, is sitting on the porch. She shows me around what remains of the house where she weathers the storm. The roof is entirely gone, everything is sodden and thick with mud.

“But I’m alive,” she says, “I’ve been spared.” When Inkiru finally sees her mother on a video call, she cries with relief. “Oh mummy,” she says, “I’ve been so worried.”

Ms McRae is thankful of having 'been spared'
Image:
Ms McRae is thankful of having ‘been spared’

Tanks have been positioned on the main street in Black River and soldiers patrol it after shops and businesses were looted.

The police chief for this area, Coleridge Minto, says he understands the desperation but is urging people to be patient.

“We can appreciate that persons are trying to grab things,” he says, “persons are devastated, but we want to ensure that we maintain law.”

Army helicopters were flying over the disaster zone and some aid is now arriving into Black River. But with other villages still largely cut off from the rest of the island, this situation is growing more dire by the day.

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