Chancellor calls for pay restraint

Chancellor Alistair Darling has called for pay restraint in both the public and private sector to avoid significant inflation increases.

Following news yesterday that inflation rose to 3.3% last month - the highest level since Labour came to power in 1997 - Prime Minister Gordon Brown announced that Government ministers would forego their annual pay rise to set an example.

Speaking to the BBC, Mr Darling said the recent double-digit pay deal for striking Shell tanker drivers was unique and would not be repeated.

'Inflationary pay rises would be disastrous not just for the country but for each and every one of us,' he told the news provider.

Inflation is now well above the Government's preferred level of 2% and Bank of England Governor, Mervyn King, has predicted that it could increase to 4% before the end of the year.