Workers should “think and reflect” on whether to ask for pay rises because they risk fuelling inflation, the governor of the Bank of England has said.
Speaking at the treasury select committee, Andrew Bailey said there was a “societal question” about whether people should be pushing for pay rises.
Bailey, who earns £575,000 a year, said that he had declined a pay rise. He said: “My view — and I was asked about this the other day — I do think people, particularly people who are on higher earnings, should think and reflect on asking for high wage increases.
“It’s a societal question. I’m not preaching about this. I was asked if I’ve taken a pay rise myself this year and I said no, I’ve asked the bank not to give me one. I felt that was the right thing for me personally.
“But everyone must make their own judgment on that. It’s not for me to go round telling people what to do.”
David Ramsden, deputy governor for markets and banking at the Bank, warned that pay rises risked “embedding” inflation in the economy. “Whether in wage bargaining but equally important in pricing of firms,” he said. “We have to avoid that inflation mentality which we’ve beginning to see signs of taking hold.”
However, a trade union chief said that the governor of the Bank of England should not “lecture” workers. Sharon Graham, Unite’s general secretary, said: “Yet again workers are being asked to pay the price, this time for inflation and the energy crisis.
“Why should they be expected to pay for the failures of the energy market and the total shambles of government policy? Workers don’t need lectures from the governor of the Bank of England on exercising pay restraint. Why is it that every time there is a crisis, rich men ask ordinary people to pay for it?
“Enough is enough, we will be demanding that employers who can pay, do pay. Let’s be clear, pay restraint is nothing more than a call for a national pay cut.”
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Don’t ask for pay rise, Bank of England governor tells high earners