London Daily

Focus on the big picture.
Thursday, Oct 09, 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
French Political Turmoil Elevates Marine Le Pen as Rassemblement National Poised for Power
China Unveils Sweeping Rare Earth Export Controls to Shield ‘National Security’
The Davos Set in Decline: Why the World Economic Forum’s Power Must Be Challenged
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
×