The governor of the Bank of England says workers should “think and reflect” on whether they should be asked to raise wages because they could drive up inflation.
Speaking on the Treasury Select Committee, Andrew Bailey said there was a “social question” about whether people should be pressured to raise their salaries.
Bailey, who earns £ 575,000 a year, said he rejected the pay rise. He said: “My view – and I was asked about it the other day – I think people, especially those with higher incomes, should ask and think about higher wage increases.
“It simply came to our notice then. I’m not promoting this. I was asked if I had personally increased my salary this year and I said no, I told the bank not to pay me. I think that was the right thing for me personally.
“But everyone has to make their own decision. It’s not up to me to tell people what to do. ”
David Ramsden, deputy governor for markets and banking at the bank, warned that wage increases “embedding” in the economy could put inflation at risk. “Wages may be bargaining, but firms are equally important in pricing,” he said. “We need to avoid the inflation mentality that we are beginning to see signs of retaining.”
However, a trade union leader said the governor of the Bank of England would not “speak” to staff. Sharon Graham, general secretary of United, said: “Workers are being asked to pay the price again, this time for inflation and the energy crisis.
“Why should they expect to pay for the failure of the energy market and the complete collapse of government policy? There is no need for a speech by the Governor of the Bank of England on the practice of wage restraint for workers. Why is it that every time there is a crisis, rich people ask ordinary people to pay their price?
“Enough is enough, we will claim that employers who can pay, pay. Let’s be clear, pay cuts are nothing more than a call for national pay cuts.