Bank of England Governor Andrew Bailey, who takes home more than £500,000 ($680,050) a year, faced ire on Wednesday from lawmakers over his call for people to show pay restraint in a bid to curb inflation pressure.
Earlier this month politicians and workers’ groups criticized Bailey for telling people not to ask for big pay rises because of the risk this would further stoke inflation pressure.
His call for pay restraint followed the worst decade for wage growth since the mid-19th century, according to the Resolution Foundation, and he was accused by some commentators of being out of touch with the struggles of working households.
Even the British government – usually reluctant to air differences with the BoE in public – said it wanted a high-wage economy but that it was not in the business of telling the private sector how to set wages.
On Wednesday Bailey sought to clarify his comments during an appearance before the Treasury Committee of lawmakers. He said companies should also take some of the hit by showing restraint in raising prices.
But Angela Eagle, a lawmaker with the opposition Labour Party, contrasted the average earnings of care workers with Bailey’s salary. “What was it, governor?” Eagle asked.
Bailey replied: “It’s somewhere over £500,000. I can’t tell you exactly what it was, I don’t carry that around in my head.”
Bailey’s remuneration totalled £575,338, including pension benefits, according to the BoE’s last set of annual accounts.
Consumer prices rose in January by 5.5 per cent in annual terms, the highest rate since 1992.
Earlier this month the BoE warned inflation was likely to peak at around 7.25 per cent in April, when household energy bills are set to rise by more than half.
“I’m not saying that people should not take pay rises,” Bailey told Eagle. “My concern is the second round effects: that if everybody tries to get ahead of the shock that we’ve had from outside, then we will get the second round effects and it will get worse.”
The Unite trade union said on Wednesday that Bailey had put workers over company bosses and profits.
“Workers didn’t cause galloping inflation or the energy crisis, so why should they pay for it?” asked Unite General Secretary Sharon Graham.
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