Bank of England governor Andrew Bailey has made an astonishing request of British workers, telling them to help the state control inflation by not asking bosses for pay rises.
“We… can try to prevent inflation from spreading, inflation becoming more ingrained in the system,” the central bank boss said in a BBC interview on the subject.
“You’re trying to get into people’s heads and ask them not to ask for too high a pay rise?” queried interviewer Faisal Islam.
“Well, broadly yes, I will say that,” the banker replied — with his BBC interlocultor unable to contain an incredulous “Really!?”
“In the sense of saying, we do need to see a moderation of wage rises,” Bailey explained, conceding that this would be “painful” for workers.
“I don’t want to in any sense sugar that message — it is painful — but we need to see that in order to get through this problem more quickly,” added the governor, who took up his post with a base salary of £495,000 ($672,000) in 2020 but has in fact been paid £575,538 in the year from last March including pension contributions — “more than 18 times higher than the median annual pay for full-time employees of £31,285”, according to the BBC.
The Conservative Party-led British state’s approach of asking workers to go through a “painful” downgrade in their real-life financial situations in order to prioritise an abstract goal of controlling inflation contrasts with that of national conservative-led countries such as Hungary, which has ordered supermarkets to return the price of staple foods to October 15th 2021 levels and give away goods set to expire to the poor, among other measures.
Governor Bailey’s approach is not novel among central bankers in Britain, however, with predecessor Mervyn King having advised Tony Blair and Gordon Brown to open the country to mass migration from the European Union’s then-new Central European member-states early “on the grounds that it would help lower wage growth and inflation… and help keep interest rates low” under the previous New Labour government, for example.
The Bank of Ireland, responsible for the United Kingdom’s nearest neighbour, made similar arguments in 2019, insisting that “sustained increases in net inward migration will be needed in the coming years” to prevent wages from rising too much, and to “ensure that growth will be not impeded by labour supply constraints”.