Finally, Britons have somebody else to focus their fury on aside from Prime Minister Boris Johnson.
Instead, BoJo and the British public have joined together to lash out at Bank of England Governor Andrew Bailey for telling Britons not to ask for a raise this year despite the threat of runaway inflation, which is already forcing many Britons to make difficult choices – like choosing between eating and heating their homes.
Last week, the BoE continued its interest rate liftoff, raising its benchmark rate to 0.5%, while officially voting to end QE and stressing the primacy of price stability in the UK’s monetary framework.
As a result, financial journalists and commentators (and even Baily himself) have apologized to the British people for taking steps that will, in all likelihood, crush their standard of living and quality of life.
But at a time when the British government is directly subsidizing the heating bills of millions of Britons while inflation surges at its fastest rate in 30 years, telling Brits not to ask for a raise is simply too much for many to bear. Speaking to the press hours after the central bank hiked its benchmark rate to 0.5% last week, the governor said businesses should assert “restraint” while negotiating pay packages with their workers to try and help keep inflation, already at its strongest level in 30 years, in check.
When asked whether the BoE was asking workers not to demand big pay rises, Bailey said: “Broadly, yes.”
“In the sense of saying, we do need to see a moderation of wage rises. Now that’s painful. I don’t want to in any sense sugar that, it is painful. But we need to see that in order to get through this problem more quickly,” Bailey said.
BoJo and the workers’ unions have been among those decrying Bailey’s comments, even as inflation is expected to accelerate to 7.25% in April; it’s already reached an annualized rate of 5.4% in January (according to data from the BoE).
But Bailey’s comments were taken as insensitive largely because of his own pay package (disbursed out of the public purse) is worth more than £575K ($777K).
One CNBC reporter spoke with some Britons to gauge their thoughts on Bailey’s comments, and as expected, they were furious.
“Telling the hard-working people who carried this country through the pandemic they don’t deserve a pay rise is outrageous,” said Gary Smith, general secretary of the pan-industry GMB trade union.
After all, it’s bad enough that surging heating costs are forcing many to choose between eating and staying warm.