London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

'Sick joke': £575,000-a-year Bank of England governor criticised over pay restraint call

'Sick joke': £575,000-a-year Bank of England governor criticised over pay restraint call

Andrew Bailey said in a BBC interview that a "moderation" in wage increases was needed to help curb inflation - but Downing Street said that was "not something that the prime minister is calling for".

Bank of England governor Andrew Bailey has been criticised after suggesting that workers should not ask for big pay rises as it battles surging inflation.

One union leader described the comments as a "sick joke" while Downing Street said the wage restraint urged by Mr Bailey was "not something that the prime minister is calling for".

The Bank has acted to combat accelerating price growth by hiking interest rates to 0.5%. But if employees ask for big wage increases to match the cost of living, its task could be made harder.

That is because of the risk that employers would then pass on those higher wage costs to consumers in the form of prices, creating an inflation spiral.

In an interview after the Bank's interest rate decision, Mr Bailey - whose latest annual pay package was worth more than £575,000 - told Sky News that the Bank believed that some price pressures driving inflation would "correct".

But he added: "What we have to do is ensure that in the meantime that there isn't more inflation pressure domestically.

"That would come for instance from things like wage bargaining."

In a separate interview, asked if the Bank was effectively asking workers not to demand big pay rises, he told the BBC: "Broadly, yes - in the sense of saying: we do need to see a moderation of wage rises. That's painful - I don't want to in any sense sugar that message, it is painful."

Mr Bailey told the BBC's Today programme on Friday: "I'm not saying 'don't give your staff a pay rise' - this is about the size of it."

But a Downing Street 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.

"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."

Gary Smith, general secretary of the GMB trade union, described Mr Bailey's call as a "sick joke", adding: "Telling the hard-working people who carried this country through the pandemic they don't deserve a pay rise is outrageous.

"According to Mr Bailey, carers, NHS workers, refuse collectors, shop workers and more should just swallow a massive real-terms pay cut at the same time as many are having to choose between heating and eating."

Unite general secretary Sharon Graham said: "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?

"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."

The Bank's call for pay restraint comes at a time when wage growth is already starting to be outstripped by inflation, meaning a real terms pay cut for workers.

That squeeze looks like getting even worse over coming months as energy bills for millions of households go up by a typical £693 in the spring and National Insurance also increases.

Price pressures are being seen across the board, with the cost of a supermarket shop rising too.

Consumer price inflation hit 5.4% in December, its highest rate since 1992, and the Bank of England now thinks it is set to soar past 7%.

It all adds up to what the Bank now forecasts will be the biggest fall in living standards since comparable records began three decades ago.

The Bank's rate hike adds to that pressure by increasing borrowing costs, with a direct impact falling on two million homeowners with variable rate mortgages.

In a news conference after this week's rate hike, Mr Bailey said: "We have not raised rates today because the economy is roaring away. An increase in Bank rate is necessary because it is unlikely that inflation will return to target without it."

Confronted with the fact that the rate hike will add to the squeeze on households, Mr Bailey said: "It is a hard message, but if we don't take this action it will be worse."

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×