PERSISTENTLY high inflation rates will prolong the cost-of-living crisis and stifle economic recovery, the TUC warned today.

According to the latest Office for National Statistics figures, inflation fell by only 0.1 percentage points to 3.1 per cent in August, as the impact of last year’s “eat out to help out” scheme dropped out of the calculation rate.

But petrol prices hit their highest level in eight years, while the cost of food, drink, second-hand cars and air travel continued to increase.

Despite the modest fall, the Bank of England expects the rate to rise above 4 per cent before the end of the year as the energy and supply chain crises continue to bite.

Most public-sector workers are currently subject to a pay freeze, while some, including many NHS workers, have already rejected below-inflation wage boosts. 

TUC general secretary Frances O’Grady said: “Inflation is still well above pay rises in the public sector and for those on the minimum wage.

“That puts the economy at risk from a fall in spending as families tighten their purse strings.

“The Chancellor [Rishi Sunak] must fully fund a real pay rise for public-sector workers. And it’s time to boost the minimum wage to £10 per hour.”

Labour shadow chief secretary to the Treasury Bridget Phillipson criticised the Tories for hitting low-paid workers with cuts to universal credit and an increase in National Insurance contributions “at a time when they’re left with less money in their pockets.”

She said: “Our plan to buy, make and sell more in Britain is the real route to a higher-wage, high-productivity economy, backed by a £10 minimum wage, fair pay agreements and an end to exploitative practices.”