Workers cannot expect pay rises to keep up with soaring cost of living, Treasury warns

Chief Secretary Simon Clarke said pay claims to match inflation will simply push prices even higher

Simon Clarke says pay demands which seek to match the rate of inflation risked creating a 1970s-style wage-price spiral (PA Wire)

The Government has issued a fresh warning to workers that they cannot expect pay rises to keep up with the soaring cost of living.

Treasury chief secretary Simon Clarke said pay demands which seek to match the rate of inflation risked creating a 1970s-style wage-price spiral, pushing prices in the shops even higher.

His intervention came after the Bank of England forecast inflation was set to hit 11% in the autumn as it hiked interest rates to 1.25% – the fifth successive rise.