Bank of England boss: don’t ask for too much pay rise

Photo: ANP

Britons should not ask for excessive wage increases despite high inflation. That call made the British central bank Governor Andrew Bailey in an interview with the BBC on Friday. That could lead to higher inflation, he said. The call did not go down well on social media because Bailey himself earns around £570,000, including pension and other extras. Converted that is just under 675,000 euros.

Bailey fears a wage-price spiral or so-called second-round effects. When inflation rises, workers and unions demand larger wage increases. Companies in turn pass the higher wage costs on to their customers, which causes prices to rise further. That way, there would be longer high inflation in the UK.

“We hope to see restraint in the negotiations,” Bailey said in the radio interview. “Because otherwise it will get out of hand. I’m not saying no one should get a raise, but we do need to see some restraint.”

The comments are consistent with what Bailey said a day earlier when commenting on a rate hike. However, he received a lot of criticism. The Bank of England expects inflation to rise above 7 percent. This is particularly the case for the poorest Britons, because they spend a relatively large amount of money on energy, fuel and food. The maximum prices for gas and electricity in the United Kingdom will be increased by more than half in April. Taxes will also go up.

Bank of England boss: don’t ask for too much pay rise
Source link Bank of England boss: don’t ask for too much pay rise

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