Pay-increase requests hurt an economy battling record-high inflation, the regulator explains
Worker unions across the United Kingdom have lashed out at the governor of the Bank of England Andrew Bailey for telling Britons to hold off on demands for higher pay, despite admitting that the cost-of-living crisis could last until 2024.
In an interview with the BBC last week, Bailey said that businesses should assert “restraint” in pay negotiations to help battle 30-year-high inflation. His comments came hours after the central bank had raised interest rates for the second time in three months.
When asked whether the regulator was asking workers not to demand big pay rises, Bailey, whose latest annual pay packet was worth over £575,000 ($779,309), said: “Broadly, yes.” He explained that while it would be “painful” for workers, some “moderation of wage rises” is needed to prevent inflation from becoming entrenched.
“Telling the hard-working people who carried this country through the pandemic they don’t deserve a pay rise is outrageous,” general secretary of the pan-industry GMB trade union Gary Smith was quoted by CNBC as having said.
“According to Mr Bailey, carers, NHS workers, refuse collectors, shop workers and more should just swallow a massive real-terms pay cut at the same time as many are having to choose between heating and eating.”
A spokesperson for PM Boris Johnson has also rejected Bailey’s calls for wage restraint, saying it’s not the government’s role to “advise the strategic direction or management of private companies.”
Britain is currently battling skyrocketing living costs. Despite inflation hitting a 30-year high in December, wages have remained stagnant, putting intense pressure on household finances. Economists fear that soaring energy bills will push inflation to more than 7% by April, a higher rate than expected.
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