Chancellor Jeremy Hunt says he hasn't ruled out a brief jump in inflation and this could become the key factor in pension increases
State Pension payments could be set for a substantial rise next year based on a huge growth in wages or a 'blip' pushing inflation back up.
The current economic position indicates that either inflation or earnings will be the overriding factor, with analysts recently suggesting that a huge leap in wages could dominate. Figures released by the Office for National Statistics show that in April-June 2023, annual growth in regular pay was 7.8 per cent, the highest regular annual growth rate since comparable records began in 2001.
He told BBC's Sunday With Laura Kuenssberg: "The plan is working, inflation is coming down." But put to him that inflation could have risen in August, Mr Hunt said: "I do think we may see a blip in inflation in September. But after that, the Bank of England is saying it will fall down to around 5 per cent."
"While the Consumer Price Index for July is widely expected to show a fall in the headline annual inflation rate, there are reported fears in Whitehall that subsequent months could reveal a plateau or even a tick back up in the rate. The inflation reading for September, or a possibly even-more-racy wage growth figure, will determine what could be a very substantial rise in the State Pension and reignite the debate over whether the Triple Lock is sustainable.
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