BoE to fol­low Os­borne’s pol­icy to halt wage in­creases for two years

The Pak Banker - - Company& -

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

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