A central banker making over $780K a year says workers should not demand big pay raises to help stem inflation

Bank of England governor Andrew Bailey
Bank of England governor Andrew Bailey says workers should not ask for big wage increases to help keep inflation under control.Dan Kitwood/WPA Pool/Getty Images
  • The Bank of England (BOE) hiked interest rates on Thursday to tame UK's high inflation rate.

  • BOE boss Andrew Bailey says workers shouldn't ask for big pay raises as that will worsen inflation.

  • Bailey was paid over £575,000 ($781,500) in the year from March 2020.

The UK's central bank boss has called on workers to hold off on asking for big pay raises because that will make inflation worse.

Bank of England (BOE) governor Andrew Bailey's comments on Thursday came on the back of a key interest rate hike to help tame rapidly rising prices.

There needs to be "a moderation of wage rises" to keep inflation in control, he told the BBC in an interview on Thursday.

When explicitly asked if he was asking workers not to ask for big pay bumps, Bailey replied: "broadly, yes."

"That's painful. I don't want to in any sense sugar that," he told the BBC. "It is painful, but we need to see that in order to get through this problem more quickly."

Bailey was paid over £575,000 ($781,500) in the year from March 2020, inclusive of pension — 18 times more than the median wage for full-time employees in the UK, the outlet noted.

His comments have sparked a raft of criticism on social media, where users complained Bailey is disconnected from the average man on the street.

As in the US, rising costs are straining pockets across the UK, where inflation has hit the highest level in three decades. The BOE expects inflation to reach around 7% by spring. The country is also experiencing a tight labor market, sending average pay, including bonuses, up about 5% in the three months between August and October.

Some economists are concerned that current market conditions may lead to a wage-price spiral, a vicious cycle of broad price gains leading to pay hikes, in turn fueling consumption and worsening inflation.

Bailey's comments are not going down well with some.

"Policymakers should think more seriously about how the country shares its wealth more evenly, rather than continuously putting the onus on working people to make sacrifices," said Luke Hildyard, director of High Pay Centre, a UK thinktank focussing on economic inequality, according to the Daily Mail.

Read the original article on Business Insider