Bank of England boss calls for wage restraint to help control inflation
The governor of the Bank of England has said workers should show restraint when asking for wage rises to help control inflation.
Andrew Bailey said he wanted to see “quite clear restraint” in the annual wage-bargaining process between staff and their employers to help prevent an upward spiral taking hold.
With households expected to face the worst annual fall in their living standards for three decades, he told the BBC’s Today programme that controlling wage increases was key to keeping a grip on inflation.
“I’m not saying nobody gets a pay rise, don’t get me wrong. But what I am saying is, we do need to see restraint in pay bargaining, otherwise it will get out of control,” he said.
The governor’s comments drew a sharp response from trade unions, with workers expected to face a drop in their incomes this year. Gary Smith, the general secretary of the GMB trade union, said Bailey’s comments were a “sick joke”.
He said: “The nerve of Mr Bailey is scarcely credible. Telling the hard-working people who carried this country through the pandemic they don’t deserve a pay rise is outrageous.”
Bailey was paid £575,538, including pension, in his first year as the Bank’s governor from March 2020, more than 18 times higher than the £31,285 median annual pay for full-time employees in the UK.
Union density in the private sector has fallen steadily since the 1970s, when high rates of inflation were fuelled by high pay settlements, to about 13%. Official figures show average weekly earnings after taking account of inflation fell in November, and remain below their pre-2008 financial crisis peak.
Kate Bell, the head of economics at the TUC, said inflation was being driven by rising energy costs, not pay demands.
“Working people need a pay rise
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