When unemployment falls and wage inflation rises

Posted by HR Zone in Managing people on Thu, 14/06/2001 - 09:49

In the past week both the CBI and the TUC have urged further cuts in interest rates for the UK economy. However, is there an element of short-termism in their calls?

Latest figures reveal that wage inflation took a leap in April, especially due to increases in the public sector which rose from 4.4% in March to 5.6%, so that rise across all sectors was from 4.8% to 5.3%.

Consider what happens then when there is a shortage of skilled labour, increasing wage inflation and a newly elected government which is committed to increasing spending in public services. It is a classic recipe for an increase in inflation.

It will prove to be a tough test for Tony Blair, Gordon Brown et al. and their spending plans. It will prove to be a tough test for Estelle Morris and the new Education and Skills department as increases in training and development will be need to be sustained in a tougher climate.

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Editor's Welcome

 

Hello! And welcome back as we enter 2012, with a busy year ahead of us all. With talk of double-dip recessions, a possible partial or even full break-up of the Eurozone and unemployment rates set to hit nearly 9%, topics such as organisational streamlining, staff resilience and talent management are likely to be on many an HR professional's lips over the next 12 months.
 
But to lighten the gloom here in the UK, we also have the Queen's Diamond Jubilee and its attendant public holidays to look forward to at the start of June. Followed by two weeks of Olympic Games from 27 July to 12 August and the Paralympics from 29 August to 9 September, each generating their own excitement, but also issues to work through for hard-pressed HR departments trying to sort out the multifarious staffing issues in advance.
 
So with an interesting but challenging year to come, HRZone promises to be with you, supporting you all the way and providing our usual insightful blend of news, analysis, community blogs and expert comment to help you sort the wheat from the chaff. As ever, we love to hear from you too so feel free to either post your words of wisdom to our blog section yourself or, in the case of longer, more in-depth ‘expert voice’ articles, drop me a line with any ideas to cath.everett@siftmedia.co.uk.....
 
Cath Everett
HRZone Editor 
 
 
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