THE TUC has called for “profit restraint” from companies and pay rises to “protect spending and avoid recession” as food and energy prices increase amid the cost-of-living crisis.

Britain’s rate of inflation has surged to a fresh 40-year high at 9.4 per cent, Office for National Statistics data revealed today.

Unions have highlighted a gap between the rate of inflation at 11.8 per cent RPI (retail price index) and pay rises like those the government announced for workers in the public sector on Tuesday which were below the inflation rate.

The TUC warned that inflation would “hammer” the pay of front-line workers.

General secretary Frances O’Grady said: “Families are under immense pressure as food and energy costs soar, and companies raise prices much faster than wages.

“We need profit restraint and pay rises that keep up with prices. And the government must play its part with decent pay rises for public servants. 

“If we do not do more to get pay rising, struggling workers will cut back their spending. Businesses will suffer, and we risk entering a recession.” 

Shadow chancellor Rachel Reeves said families were becoming more worried every day about the cost-of-living crisis while the Conservative government is generating “chaos, distraction and unfunded fantasy economics.”

Unite pointed to the findings of research it published in June which concluded corporate profits were to blame for almost 60 per cent of inflation, adding it has been these financial returns and not workers’ wages driving the bulk of the soaring cost of living.

General secretary Sharon Graham said: “The government and corporate UK are scapegoating workers, trying to blame them for record rising prices, but it’s not workers’ wages driving inflation, it’s relentless corporate profiteering.

“It’s time we started talking about that.”

The real wages of hospital porters will reduce by £200 this year, maternity care assistants by £600, nurses by £1,100, and paramedics by more than £1,500, according to an analysis by the TUC.

RMT general secretary Mick Lynch said: “Suppression of wages has allowed companies to keep their profit margins high, with the UK never having more billionaires.

“There is no cost-of-living crisis for the rich in Britain and RMT along with other unions will not meekly accept pay freezes.”

Chancellor Nadhim Zahawi said the government was working to “bear down on inflation” with the Bank of England.

Mohsin Rashid, co-founder of ZipZero and an expert on personal finance said the inflation figures were unsurprising but highlighted the “brutal” reality of the economic landscape with a lack of action being taken by those “most able to address the cost of living crisis.”

“According to our independent research, 84 per cent of UK adults think energy providers should be doing more to help people through the cost-of-living crisis, with 81 per cent saying the same of the government and 70 per cent wanting retailers to offer more support,” Mr Rashid said.

“This attitude will not suffice. Although we may be battling extreme heat now, the winter warns of even graver danger as millions of Britons will be plunged into fuel poverty. Action is urgently needed.”