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Tube Strike Called Off At Last Minute

Tube workers union the RMT has advised members to accept an improved pay offer from employers and called off the imminent 3 day strike action which would have crippled London and caused travel chaos. The Union has been able to negotiate a 4.99% deal for this year and a future pay structure which will see future rises based on the Retail Price Index plus 0.85% from April 2009. But is this good for the economy?

This has to be one of the most astute wage deals in the history of the Unions and will see members more that keep pace with the cost of living in the future. While there has been no direct comment from the government as it is a private company issue there will be much disappointment. As the authorities seek to keep wage inflation under control this high level wage deal could open the door for more inflation bursting deals. The future base for the deal is also very interesting and will put more pressure on the rate of inflation and feed consumer spending at a time when restraint is being called for.

However, this does show the current power of the Unions and the fact that they have the government where they want them. Unable to criticise them in public because of their support for the Labour Party they have effectively been given a free reign to go about their business and disrupt the UK with a growing number of strike calls.

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