Don’t ask for big pay rise! Staff should not demand higher wages because it could contribute to soaring cost of living, Bank of England boss warns
- Andrew Bailey said staff asking for higher wages could see price rises ingrained
- Campaigners said many Britons had already struggled through lacklustre pay
- Came as Bank of England hiked interest rates for second time in two months
- It is increasingly worried about cost of living, with inflation set to hit 31-year high
Workers must not ask for big pay rises or they could contribute to the spiralling cost of living, the Bank of England Governor warned yesterday.
Andrew Bailey said staff should not demand higher wages because this could lead to price rises becoming ‘ingrained’.
But the comments from the Governor, who was paid a total of £575,538 in the 2020-2021 financial year, raised eyebrows among campaigners who said many Britons had already struggled through years of lacklustre pay.
Andrew Bailey (pictured), the Bank of England Governor, said staff should not demand higher wages because this could lead to price rises becoming ‘ingrained’
Mr Bailey’s remarks came as the Bank of England hiked interest rates for the second time in two months, from 0.25 per cent to 0.5 per cent.
It has become increasingly worried about the soaring cost of living, as inflation is expected to hit a 31-year high of 7.25 per cent in April.
By hiking rates, the Bank hopes to keep a lid on prices by encouraging saving rather than spending.
Inflation has been caused by sky-high energy prices and supply chain chaos caused by the pandemic.
Families are desperate for pay rises as many are already struggling to make ends meet.
But the Bank fears that this could be a vicious circle. The more money workers have, the more they will spend and the more this will push prices higher.
Mr Bailey’s remarks came as the Bank of England hiked interest rates for the second time in two months, from 0.25 per cent to 0.5 per cent
Asked in an interview with the BBC whether he was effectively asking employees not to try and wangle larger pay packages, Mr Bailey said: ‘Broadly, yes.’
Luke Hildyard, director of think-tank the High Pay Centre, said: ‘Policy makers should think more seriously about how the country shares its wealth more evenly, rather than continuously putting the onus on working people to make sacrifices.’