The Bank of England governor is facing a backlash from unions after saying workers should not ask for big pay rises in the face of a cost of living crisis.
Andrew Bailey, whose pay last year was £575, 538 in pensions and earnings, has also been criticised by Downing Street for his comments.
Unions were furious after Mr Bailey said higher wages would increase inflation further, as it is expected to go up to 7 percent this year.
Mr Bailey told the BBC’s Today programme: ““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”.
Union comments
The TUC said his comments were “ill-founded” while the GMB union called them a “sick joke”.
GMB’s general secretary said: “Telling the hard-working people who carried this country through the pandemic they don’t deserve a pay rise is outrageous.”
General Secretary of Unite, Sharon Graham, meanwhile, said it was not the average citizen that caused the crisis, therefore they should not be paying for it.
She asked: “Why is it that every time there is a crisis, rich men ask ordinary people to pay for it?”
She said Mr Bailey’s comments amounted to calling for a “national pay cut”.
Mr Bailey said it was important to restrict wage growth needed to keep grip on inflation. He said after the economic turbulence since the pandemic, lower wages would help stabilise the economy.
Rising energy costs affecting other household costs
The bank raised interest rates to 0.5 percent last week to deal with inflation, while warning there would be a two percent drop in disposable incomes to households. This is the worst it has been since the 1990s. Rising gas and electricity costs are adding to rising costs.
Chancellor Rishi Sunak said it was “not sustainable to keep holding the price of energy artificially low.”
He said: “For me to stand here and pretend we don’t have to adjust to paying higher prices would be wrong and dishonest.”
The Guardian calls it ‘the worst decade for average pay growth since the Napoleonic wars, with inflation-adjusted pay still below the pre-2008 financial crisis peak.’
The Resolution Foundation said in its public spending report this week that despite the government announcing a £200 discount to all households, five million households will experience “fuel stress” by springtime. It says ‘the £200 electricity bill discount is effectively a loan, repaid by households through higher bills over the next five years.’
Adding: “Even after the Government’s attempt to defray some of the pain of higher energy prices, the legacy for living standards in 2022 is bleak.”
Feyaza Khan has been a journalist for more than 20 years in print and broadcast. Her special interests include neurodiversity in the workplace, tech, diversity, trauma and wellbeing.
