Bank chief calls for pay restraint... then gives staff a big rise
THE Bank of England has handed staff an inflationbusting pay rise despite calling for wage restraint.
Its 5,000 staff will see their salaries increased by 4 per cent on average over the next 12 months.
Although this is in line with the current rate of inflation, officials on Threadneedle Street expect it to reduce sharply this year.
The Office for Budget Responsibility (OBR) this week said the rate of price rises should fall below 2 per cent within months.
Governor Andrew Bailey, who saw inflation spiral out of control on his watch, has previously told workers not to ask for big pay rises. And the Bank’s chief economist Huw Pill stoked outrage after claiming that Britons should accept they were poorer following the energy crisis.
However, the central bank has handed its own staff pay rises that are likely to vastly outstrip inflation this year.
Officials said the rises underlined the need to ‘ strike a balance between our own budget constraints, the best use of public funds, and addressing the cost of living pressures facing our staff’.
Inflation rocketed as Covid restrictions came to an end and the invasion of Ukraine sent energy prices soaring.
Mr Bailey has faced criticism over his handling of the economy after inflation hit a 40- year high of 11.1 per cent in late 2022. The Bank has raised interest rates from a record low of 0.1 per cent to a 16-year high of 5.25 per cent since December 2021 in a bid to bring inflation back under control.
This has severely dented the economy but inflation is now on course to return to its 2 per cent target – raising hopes of interest rate cuts this year.