LONDON (Reuters) – British Prime Minister Rishi Sunak said he was committed to the government’s mechanism for increasing state pensions even though it is likely to cost billions of pounds more than usual given high inflation.
The pension triple lock is a government promise to raise publicly funded pensions by the level of earnings, inflation or 2.5%, whichever is highest.
“Of course the government is committed to its policy on the triple lock,” Sunak told ITV News on Wednesday when asked whether he would stick to the pledge despite the rate of inflation.
“Now there is a statutory, a legal, process for determining the increase in pensions and benefits that happens in the autumn and that’s where those final decisions are made.”
Data published earlier on Wednesday showed Britain’s headline rate of inflation dropped sharply to 6.8% in July but remained more than three times the Bank of England’s target.
Earnings have also increased sharply, with official data published on Tuesday showing them up by about 8%.
At the start of 2023 Sunak set himself a target of halving inflation this year, something which remains in the balance as price growth has proven more persistent than forecast.
“When I set out that target people said ‘oh that’s very easy he’s not ambitious enough’,” he told ITV. “I thought it was an ambitious target, but it’s right to be ambitious for our country.”
Last November, with inflation in double-digits, finance minister Jeremy Hunt decided to raise state retirement and welfare benefits payments in line with price growth at a cost of about 11 billion pounds ($14.02 billion).
($1 = 0.7844 pounds)
(Writing by William Schomberg, Editing by Kylie MacLellan)