Friday, August 5, 2022

Bank of England governor warns wage increases will fuel inflation – live

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The Bank of England governor has been criticized for saying wage increases would fuel inflation.

The bank yesterday hiked interest rates to 1.75 percent – the highest level in 27 years – and warned the UK will plunge into a year-long recession this autumn.

Gov. Andrew Bailey has urged workers to cap their demands for wage increases this year and warned of the impact of high inflation on those without “bargaining power”.

“When everyone tries to beat inflation, it doesn’t go down, it gets worse, that’s the problem,” Mr Bailey said.

However, his proposal drew strong criticism, as unions insisted that “it was not up to the beleaguered workers to restrict further”.

Kate Bell, chief economic officer at TUC: “Without wage increases, working people will just stop spending on everything non-essential – and that will hurt our high streets, damage business and make a recession very likely, threatening jobs up and down the country.”

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