BoE to follow Osborne’s policy to halt wage increases for two years
LONDON: Bank of England Governor Mervyn King froze his employees' salaries to match the government's policy on public-sector pay, raising the prospect of staff defections. The London-based central bank will follow Chancellor of the Exchequer George Osborne's policy to halt wage increases for the next two fiscal years, according to a Bank of England official. Osborne announced June 22 that pay won't rise for public-sector employees earning more than 21,000 pounds ($33,000), Bloomberg reported .
"King would have been keen to move in lockstep with what was announced," Colin Ellis, a former Bank of England official who is now chief economist at the British Venture Capital Association, said in an interview. Still, "the bank started to lose some really good, highlevel people in recent years, and clearly this is going to make life harder for them."
Osborne unveiled his pay policy in an emergency budget to help cut Britain's record peacetime deficit. The bank's announcement on salaries coincides with a week of media focus on the governor, including WikiLeaks's publication of a confidential U.S. diplomatic cable citing his concern on Osborne's and Prime Minister David Cameron's inexperience.
The Bank of England official said that as part of the public sector, the bank will freeze pay and that it was right that the bank respects public policy.
Four heads of division at the Bank of England left in the past six months, according to a person familiar with the matter, who didn't want to be identified because they aren't authorized to speak to journalists. -PB News