The Governor of the Bank of England has advised workers not to demand a salary increase as the country fights decades of high inflation. As a result, rising wages create a spiral of wages and prices, which can have a further impact on the economy.
“I’m not saying no one will raise salaries. Don’t get me wrong. But I think I’m saying you need to look at curbing wage negotiations, otherwise you’ll be out of control. Let’s do it, “Governor Andrew Bailey told BBC4 Radio in an interview aired on Friday.
The central bank has raised interest rates from 0.25% to 0.50% as the UK faces inflationary pressures that have not been seen for 30 years. Inflation is estimated to be above 7% in 2022, which will have a significant negative impact on disposable income.
Governor’s logic shows that higher-wage business costs are being passed on to consumers by businesses through higher prices, launching a spiral that spurs inflation to higher ranges. But if left unchecked, Bailey said in an interview with Sky News that price pressures would be “corrected.”
The consumer price index increase rate in December 2021 was 5.4%, and half of the policy makers wanted a higher interest rate, about 0.75%. It is the first time in two months that the Bank of England has raised rates.
Inflation is projected to reach 7.25 percent in April before it settles. After-tax income for working households is expected to decline by 2% in 2022, resulting in income pressures and living expenses that have not been seen since 1990.
Bailey said the wage situation was “painful.” But to solve this problem more quickly, you need to confirm it. “
UK households are already fighting expensive energy prices as UK energy regulator Ofgem has approved a record increase of 54% in price limits. This is expected to affect approximately 22 million households in the region.
The UK government announced Thursday that it will provide a series of financial support measures to reduce the impact of rate hikes and help people with bill discounts.
Bailey’s comments were angry with the general public and politicians who turned their finger on the governor’s relatively high salary.
“The Bank of England Governor Andrew Bailey said at £ 575,000 that people shouldn’t ask for a big salary increase. Those who can’t pay bills or skip meals to feed their children. Please tell us that. Since 2010, many workers have not experienced real wage increases. ” I have written Nottingham East Labor Party member Nadia Whittome, Twitter.