A slump in inflation caused by economic damage from the coronavirus could pave the way for the abolition of the state pension ‘triple lock’, according to pension consultants Lane Clark and Peacock (LCP).
The firm modelled the likely level of inflation over the coming months based on three economic scenarios - whether the economy is ‘stuck in the doldrums', ‘steady as she goes' or enjoying a ‘bounce back'. Unless there is a strong recovery in the economy, LCP said CPI inflation could be negative in September, and could even fall below -2%. With prices falling, the government will find it much easier to justify not increasing the state pension by the 2.5% implied by the ‘triple lock' policy. The triple lock guarantees the basic state pension will rise in line with the lowest of earni...
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