The Bank of England’s chief economist, Huw Pill, reckons that people “need to accept” they are poorer than previously and that firms should stop trying to pass on rising costs by hiking prices and workers by demanding higher wages. Speaking on a podcast produced by Columbia Law School, Mr Pill said a game of “pass the parcel”, which generates inflation, is taking place in the UK economy as companies and households look to pass on their mounting costs. He said that our imports, such as natural gas, have increased in price more than our exports, now mainly services, and added: “If the cost of what you’re buying has gone up compared to what you’re selling, you’re going to be worse off.”
As energy, food and drink prices continue to soar, interest rates rise for the twelfth time in a row, and the cost-of-living crisis shows little sign of abating, Pill’s words may fail to console hard-pressed householders. And they follow heavily criticised comments last year by the Bank of England’s governor, Andrew Bailey, who said workers should not ask for big pay rises, to try to stop prices rising out of control. With Bailey’s annual salary in the region of £500,000 and Pill earning around £180,000, their words, for many, will continue to reinforce the view
that the Bank is completely out of touch with reality.
And banking bigwigs are not alone in coming in for cash-check criticism. Prime Minister Rishi Sunak’s family fortune is counted in multi-millions, top business bosses still rake in massive bonuses, and fresh reports of those who made quick millions from providing covid PPE equipment, such as Tory peer Michelle Mone, appear regularly in the headlines. So, while some may be reluctantly ready to tighten their belts, for others the figures just won’t add up.
