Sabtu, 05 Februari 2022

Boris Johnson lashes out at Bank of England governor Andrew Bailey: Do not show pay restraint - City A.M.

Andrew Bailey

Downing Street stressed this afternoon Boris Johnson fiercely disagreed with Bank of England Governor Andrew Bailey over his call for workers to show “restraint” over pay rises amid high inflation.

The Prime Minister’s official spokesman said: “It’s not something that the Prime Minister is calling for. We obviously want a high-growth economy and we want people’s wages to increase.”

He added: “We recognise the challenge of the economic picture which Andrew Bailey set out but it’s not up for the Government to set wages or advise the strategic direction or management of private companies.”

Andrew Bailey warning

The Governor of the Bank of England warned that inflation may not recover to normal levels for another two years and pay squeezes are expected.

Andrew Bailey told BBC Radio 4’s Today programme: “It is going to be a difficult period ahead, I readily admit, because we all get we are already seeing and we’re going to see a reduction in real income.

“Based on what we see today, I would expect that, so we’re going to start coming out of it in 2023, and two years from now we expect we’ll be back on to a more stable – certainly inflation – back to a more stable position.”

His comments came after the Bank said inflation is likely to hit 7.25 per cent in April.

The Governor also encouraged companies not to give staff big pay rises to combat inflation, warning it could lead to a spiral of high prices followed by high wages, sending inflation higher.

“I’m not saying don’t give yourself a pay rise. This is about the size of it (any rise)… we do need to see restraint.”

Andrew Bailey

Mr Bailey added: “We think that some of the bottlenecks around the world that have been causing disruption to the supply of goods and have been pushing prices up are starting to ease.

“We think there are good reasons to believe energy prices will start to ease, not least because they are somewhat seasonal. There are risks on both sides of that. It’s possible that energy prices will come down more rapidly because they’re so elevated at the moment.”

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2022-02-05 07:25:00Z
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