Treasury warns of above-inflation rises

Treasury Minister Allan Bell says the prospect of strikes over pay raises the fear of wage-led inflation – and the possibility of higher unemployment.

Next Friday, Manx Telecom staff are to hold a one-day strike after rejecting a pay offer below the current rate of inflation.

But Mr Bell says if that’s the start of a trend, it could push the Island into recession as inflation rises even further than the current level of 6.5 per cent.

And he’s warning if wage demands remain high, it could mean Island companies lose their competitive edge: