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Workers asking for pay rises risk embedding inflation, says Bank boss

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theguardian.com

Workers should refrain from asking for inflation-matching pay rises, according to the governor of the Bank of England, who warned there was a risk of inflation becoming “embedded”.Andrew Bailey, who added that he does not expect interest rates to settle at pre-financial crisis levels of about 5%, refused to be drawn on what an appropriate pay rise would be, a day after he warned inflation would hit 13% in October.

The Bank’s inflation target is 2%.“If everybody tries to beat inflation – and that is in both price-setting and wage-setting – it doesn’t come down, it gets worse,” he said, speaking to BBC Radio 4’s Today programme on Friday. “My key point is, if inflation becomes embedded and persistent, it gets worse.

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