The Guardian view on Britons getting poorer: don’t accept it
S truggling households, sinking businesses: the Bank of England wants you to swallow some bitter news for your own good. You “need to accept” that you are poorer. Stop asking for wage rises. Do not sneak up prices. Surrender your “reluctance to accept that, yes, we’re all worse off”. Such thoughts only produce higher inflation – and that simply won’t do, according to the Bank’s chief economist, Huw Pill. In an interview this week, he accused families and business of indulging in a game of “pass the parcel” – pushing higher costs between themselves when what they really need to do is admit that “we all have to take our share”.
If Mr Pill himself displays such Zen-like acceptance, it may owe something to the fact that he received £88,000 for his first five-and-a-bit months at Threadneedle Street, equivalent to an annual salary of £180,000. Another advocate of serenity is the Bank’s governor, Andrew Bailey, who last year told workers not to make big pay demands, while raking in half a million pounds. Ordinary Britons may detect a touch of Versailles here, of being advised to chow down on brioche because no bread is to be found. Such statements do not enhance one’s authority, as Marie Antoinette could attest.
More than a quarter-century has passed since Gordon Brown set the Bank free, yet interest rates and inflation remain as political as tax rates and social security. Prices in shops, on forecourts and at the factory gate reflect who has how much power, whether that is oil producers in the Middle East, big supermarket chains or in-demand workers. For over a year, the Bank has been acting as if workers are an inflationary threat. It has raised rates over and over again, with another increase expected next week. Yet there has
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