London Daily

Focus on the big picture.
Wednesday, Oct 29, 2025

Bank of England economist says people need to accept they are poorer

Bank of England economist says people need to accept they are poorer

The Bank of England's top economist has said people in the UK need to accept that they are poorer otherwise prices will continue to rise.

Huw Pill told a podcast in the US that there was a "reluctance to accept that, yes, we're all worse off".

He said in response to higher bills and other costs rising, workers had responded by asking for wage increases and businesses were charging more.

UK inflation, the rate of which prices rises, was 10.1% in the year to March.

The rate dipped last month from 10.4% but that does not mean prices are falling. It means they are rising at a slightly slower pace.

Inflation in the UK has been higher than the Bank of England's target of 2% for some time.

Part of the Bank's job is to keep inflation at its target rate. In response to rising prices it has increased interest rates, which make the cost of borrowing money more expensive.

This move, in theory, is suppose make people reduce spending, so that demand for goods cools down and price rises slow down.

With households being hit by soaring energy bills and food costs, many workers have been asking for pay rises to help ease the pressure on budgets.

Job vacancies have been falling, but are still higher than they have been for decades, strengthening people's hands as they ask for pay rises.

Although pay has been going up, it has not matched inflation, meaning people are worse off.


'Someone needs to accept they're worse off'


Mr Pill said people demanding pay increases and businesses putting prices up added to inflation and caused prices to rise even further across the economy.

"Somehow in the UK, someone needs to accept that they're worse off and stop trying to maintain their real spending power by bidding up prices, whether through higher wages or passing energy costs on to customers etc," he told the Beyond Unprecedented podcast from Columbia Law School.

"What we're facing now is that reluctance to accept that, yes, we're all worse off and we all have to take our share; to try and pass that cost onto one of our compatriots and saying: 'We'll be alright, but they will have to take our share too'.

"That pass-the-parcel game that's going on here, that game is one that's generating inflation, and that part of inflation can persist."

Mr Pill is not the first Bank of England official to warn about wage rises contributing to inflation.

Last year, the Bank's governor Andrew Bailey urged people not to ask for big pay rises, to try and stop prices rising out of control.

His comments were immediately met with backlash, with unions saying they were "ill-founded". At the time, Downing Street and the Treasury distanced themselves from Mr Bailey's comments.

Mr Bailey later urged moderation in price rises from businesses.

Inflation was expected to fall below 10% last month but soaring food prices meant it fell by less than expected.

The British Retail Consortium said it expected food prices to start falling "over the next few months".

But the retail industry body said there was a three to nine-month lag to see price falls reflected in shops.

Newsletter

Related Articles

0:00
0:00
Close
UK Retail Inflation Slows as Shop Prices Fall for First Time Since Spring
Next Raises Full-Year Profit Guidance After Strong Third-Quarter Performance
Reform UK’s Lee Anderson Admits to 'Gaming' Benefits System While Advocating Crackdown
United States and South Korea Conclude Major Trade Accord Worth $350 Billion
Hurricane Melissa Strikes Cuba After Devastating Jamaica With Record Winds
Vice President Vance to Headline Turning Point USA Campus Event at Ole Miss
U.S. Targets Maritime Narco-Routes While Border Pressure to Mexico Remains Limited
Bill Gates at 70: “I Have a Real Fear of Artificial Intelligence – and Also Regret”
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Saudi Arabia Unveils Vision for First-Ever "Sky Stadium" Suspended Over Desert Floor
Amazon Announces 14 000 Corporate Job Cuts as AI Investment Accelerates
UK Shop Prices Fall for First Time Since March, Food Leads the Decline
London Stock Exchange Group ADR (LNSTY) Earns Zacks Rank #1 Upgrade on Rising Earnings Outlook
Soap legend Tony Adams, long-time star of Crossroads, dies at 84
Rachel Reeves Signals Tax Increases Ahead of November Budget Amid £20-50 Billion Fiscal Gap
NatWest Past Gains of 314% Spotlight Opportunity — But Some Key Risks Remain
UK Launches ‘Golden Age’ of Nuclear with £38 Billion Sizewell C Approval
UK Announces £1.08 Billion Budget for Offshore Wind Auction to Boost 2030 Capacity
UK Seeks Steel Alliance with EU and US to Counter China’s Over-Capacity
UK Struggles to Balance China as Both Strategic Threat and Valued Trading Partner
Argentina’s Markets Surge as Milei’s Party Secures Major Win
British Journalist Sami Hamdi Detained by U.S. Authorities After Visa Revocation Amid Israel-Gaza Commentary
King Charles Unveils UK’s First LGBT+ Armed Forces Memorial at National Memorial Arboretum
At ninety-two and re-elected: Paul Biya secures eighth term in Cameroon amid unrest
Racist Incidents Against UK Nurses Surge by 55%
UK Chancellor Rachel Reeves Cites Shared Concerns With Trump Administration as Foundation for Early US-UK Trade Deal
Essentra plc: A Closer Look at a UK ‘Penny Stock’ Opportunity Amid Market Weakness
U.S. and China Near Deal to Avert Rare-Earth Export Controls Ahead of Trump-Xi Summit
Justin time: Justin Herbert Shields Madison Beer with Impressive Reflex at Lakers Game
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
Giuffre’s Memoir Alleges Maxwell Claimed Sexual Act with Clooney
House Republicans Move to Strip NYC Mayoral Front-Runner Zohran Mamdani of U.S. Citizenship
Record-High Spoiled Ballots Signal Voter Discontent in Ireland’s 2025 Presidential Election
Philippines’ Taal Volcano Erupts Overnight with 2.4 km Ash Plume
Albania’s Virtual AI 'Minister' Diella Set to 'Birth' Eighty-Three Digital Assistants for MPs
Tesla Unveils Vision for Optimus V3 as ‘Biggest Product of All Time’, Including Surgical Capabilities
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
Convicted Sex Offender Mistakenly Freed by UK Prison Service Arrested in London
United States and China Begin Constructive Trade Negotiations Ahead of Trump–Xi Summit
U.S. Treasury Sanctions Colombia’s President Gustavo Petro over Drug-Trafficking Allegations
Miss USA Crowns Nebraska’s Audrey Eckert Amid Leadership Overhaul
‘I Am Not Done’: Kamala Harris Signals Possible 2028 White House Run
NBA Faces Integrity Crisis After Mass Arrests in Gambling Scandal
Swift Heist at the Louvre Sees Eight French Crown Jewels Stolen in Under Seven Minutes
U.S. Halts Trade Talks with Canada After Ontario Ad Using Reagan Voice Triggers Diplomatic Fallout
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
China and Russia Deploy Seductive Espionage Networks to Infiltrate U.S. Tech Sector
Apple’s ‘iPhone Air’ Collapses After One Month — Another Major Misstep for the Tech Giant
Graham Potter Begins New Chapter as Sweden Head Coach on Short-Term Deal
Ecuadorian President Daniel Noboa Alleges Poison Plot via Chocolate and Jam
×