Granted inflation is not a problem at this time - but all Government Pension and the State Old Age Pension increases each year are based on the RPI for the previous September. Thus these pensions will increase by 5% wef April this year. Any attempt to reduce the increase in these Pensions would be Electoral suicide.
Curbing pay increases for those who cannot protest or withdraw their labour becomes a very attractive option in these circumstances.
Last edited by cazatou; 11th Feb 2009 at 14:50.