Bank of England Governor Andrew Bailey warned that 'unsustainable' wage growth cannot continue if we want to curb inflation. Photo: REUTERS/Anna Gordon.
Over the past year, the Bank of England has paid out £25m in bonuses to employees, despite warnings from its governor that employers should exercise 'restraint' on wage increases. against the backdrop of a rapid rise in inflation.
Threadneedle Street has confirmed that 429 officials have received annual bonuses of over £10,000 each this year, with some receiving up to £22,500 each.
This comes despite repeated warnings from Andrew Bailey, manager Bank that rising wage bills are fueling inflation, which stood at 8.7% in May, well above the 2% target.
Mr Bailey said the “unsustainable” wage growth could not continue at its current pace due to fears of a wage-price spiral, a situation in which wages continue to rise to keep pace with rising prices.
Speaking at the Bankers' Annual Dinner at the Mansion House last week, Mr Bailey said: “Price and wage increases at current rates are not in line with inflation targets.”
Bank of England employees are paid £62,189 on average, according to data compiled by openDemocracy. Mr Bailey is paid almost £500,000 a year, while his deputies earn between £348,000 and £378,000 each.
A Bank of England spokesman said: To his staff. There is no doubt that the Bank is improperly rewarding its employees.”
This is ahead of the latest inflation data due on Wednesday. Traders expect data to show headline inflation eased from 8.7% to 8.2% in June. However, core inflation, which excludes food and energy price volatility, is forecast to remain flat at 7.1 percent.
Money markets are now fully priced in that the Bank of England will raise interest rates up almost 6 percent for December. Last month, interest rates hit 5 percent.
Last year, the Bank of England came under fire for providing bonuses even after Mr Bailey called for “restraint” in asking for massive wage increases to avoid The economy is overheating.
Hugh Pill, the bank's chief economist, has come under fire for telling British families facing a soaring cost of living to 'take it easy' after the inflation surge.
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He warned that this was required because higher wages only drove up prices, prolonging the pain. However, a senior Bank of England official later backed down, admitting he should have used “less inflammatory” language.
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