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Original poster

Is the Bank of England for real here?

238 replies

TheWhalrus · 04/02/2022 12:29

So, just now the Bank of England announces that to combat inflation, employers should be looking to not increase staff salaries (www.theguardian.com/business/2022/feb/04/bank-of-england-boss-calls-for-wage-restraint-to-help-control-inflation). So at a time of massive inflation, we're apparently not supposed to be trying to earn more or aspiring for a higher salary in order to maintain our own living standards? Rather the Bank of England expects us to knuckle down and accept these circumstances because they can't control inflation.

Has this guy (annual salary £575,538) been smoking something? Or does he really have no grasp at all of reality?

OP posts:
NewPapaGuinea · 04/02/2022 13:02

What a bell end. One one hand BJ is saying wages are going up (they aren’t) on the other you have this dick saying don’t ask for a pay rise. Even if you did get one, unless it’s over 5% it’s a real terms pay cut.

Dogsandbabies · 04/02/2022 13:02

From an economics point of view they are right. And restraint in wage growth is unlikely to make a huge difference for the people who are struggling. However if wage restraint helps limit inflation and ensure that higher prices do not remain the norm it will be helpful in the long run.

Raises are much more likely to advantage higher earners that are already not struggling. Whereas the BoR advice is more likely to help everyone in the long term.

The biggest issue here is government and the ridiculous 'help' they are planning to give households. If help was genuine and targeted to the right groups then that would be a solution. In combination with the advice.

PearlclutchersInc · 04/02/2022 13:03

Basic economics - take money out of the economy.

Noone ever said anything about fairness

WindyState · 04/02/2022 13:05

@forinborin

He's right though, irrespective of how much he earns. And his salary is (a) a drop in the ocean of the British economy (b) he's actually worth it, compared to many, many other people in positions of power.
Whether he is right or not is debatable, but that's besides the point. It's just another completely tone-deaf statement from an elite wanker

The fact is, it's the job of government and the BoE to control inflation.

It's not the job of the average people who don't earn 6 figure salaries to do so and to request them to not ask for pay rises to help ends meet is utterly outrageous.

Ozanj · 04/02/2022 13:07

This guy was equally as out of touch when he was in the FCA, on the side of the banks, which is why many complaints have taken years to resolve.

SuitcaseOfWhine · 04/02/2022 13:07

I honestly think that the people that run/exploit this country are so out of touch now that the world is starting to laugh at them. It beggars belief, it really does.

We now have quite wealthy people calling for the extremely wealthy to stop taking the piss and pay their share now, instead of avoiding tax and exploiting the system. We are in for some very interesting times ahead. I think we will reach boiling point quite soon.

forinborin · 04/02/2022 13:07

A better way to say it might have been “Hold tight, ride out the inflation this year and things will level off next year.”
But this is absolutely far from guaranteed. Not necessarily even the most likely scenario. Should he have lied?

Ozanj · 04/02/2022 13:11

@PearlclutchersInc

Basic economics - take money out of the economy.

Noone ever said anything about fairness

It isn’t basic economics. He is quoting a specific branch of free market economics. There are many other models that are more applicable to the modern post-covid world - eg Japan / Scandinavian models of social economics. The entire concept of the 4 day working week came from these alternative models.
Changedmane · 04/02/2022 13:11

I am saying that he chose deliberately inflammatory words on a day that prices rose against a backdrop of tens of billions lost during covid. I am not paid £575,000 and it took me ten seconds to think of a calming, vaguely reassuring statement that wouldn’t annoy everyone. Did I get it wrong? Possibly. Did it exemplify that there are always several ways of saying the same thing without winding people up? Hopefully.

RandomLondoner · 04/02/2022 13:13

This isn't a random unnecessary utterance by someone who could have kept quiet, it's literally the job of the Bank of England to control inflation, including by making statements exactly like this, at a time like now.

Changedmane · 04/02/2022 13:13

Actually no the projection of 6% inflation next year was reality which is why I said it

forinborin · 04/02/2022 13:14

The fact is, it's the job of government and the BoE to control inflation.
And this is exactly what he is asking the general population to think about and help with. They cannot control the inflation with an iron fist, the UK is not a dictatorship with a centrally planned economy running off five-year plans.

I cannot really see the contradiction?

Changedmane · 04/02/2022 13:14

I see @RandomLondoner. Do you think it achieved it’s aim, or would you say lessons could be learnt? Grin

FredBair · 04/02/2022 13:18

@Ylvamoon

Word of caution... I totally understand the frustration and the who the hell he thinks he is cenario! But (for economic sense) if wages rise then the cost of goods will rise and with this inflation will go up.... before we know it, we are in a downwards spiral where wages and the cost of goods will be tail chasing.
This. It has happened before. In the 1970s infĺation climbed tp 20%. It was a constant cycle of inflation, price rises and then pay increases which caused more price rises.
Ozanj · 04/02/2022 13:19

@RandomLondoner

This isn't a random unnecessary utterance by someone who could have kept quiet, it's literally the job of the Bank of England to control inflation, including by making statements exactly like this, at a time like now.
Many countries have higher rates of inflation and yet have forced companies to provide inflationary linked pay rises to employees. The UK (and USA) are the only countries not doing this
RandomLondoner · 04/02/2022 13:20

The entire concept of the 4 day working week came from these alternative models.

Reducing economic output by making people work less sounds like a terrible solution to inflation. By contrast, the conventional solution of (say) working a 5-day week for 4 days pay reduces money in circulation without reducing output and wealth and material standards of living. (Well there's a reduction in standard of living from working 25% more, but apart from that...)

Money isn't wealth, total economic output is, and a 4-day week reduces the latter. It's literally a prescription for making the whole country poorer. (Nothing wrong with anyone who wants to working less, it's the idea of enforcing it as a societal norm that I don't like the sound of.)

Iggly · 04/02/2022 13:21

@TheWhalrus

So, just now the Bank of England announces that to combat inflation, employers should be looking to not increase staff salaries (www.theguardian.com/business/2022/feb/04/bank-of-england-boss-calls-for-wage-restraint-to-help-control-inflation). So at a time of massive inflation, we're apparently not supposed to be trying to earn more or aspiring for a higher salary in order to maintain our own living standards? Rather the Bank of England expects us to knuckle down and accept these circumstances because they can't control inflation.

Has this guy (annual salary £575,538) been smoking something? Or does he really have no grasp at all of reality?

He, like the whole of the top tier of government, are completely and utterly out of touch.

Maybe if he didn’t get paid so much, like so many others, then there would be more for everyone else.

Iggly · 04/02/2022 13:22

@RandomLondoner

The entire concept of the 4 day working week came from these alternative models.

Reducing economic output by making people work less sounds like a terrible solution to inflation. By contrast, the conventional solution of (say) working a 5-day week for 4 days pay reduces money in circulation without reducing output and wealth and material standards of living. (Well there's a reduction in standard of living from working 25% more, but apart from that...)

Money isn't wealth, total economic output is, and a 4-day week reduces the latter. It's literally a prescription for making the whole country poorer. (Nothing wrong with anyone who wants to working less, it's the idea of enforcing it as a societal norm that I don't like the sound of.)

Where’s the evidence for your claims about output? People may be more productive working four days a week and therefore more likely to use their leisure time on things like eating out etc.
Iggly · 04/02/2022 13:24

@RandomLondoner

This isn't a random unnecessary utterance by someone who could have kept quiet, it's literally the job of the Bank of England to control inflation, including by making statements exactly like this, at a time like now.
Well they’ve not done a good job of it have they 😂

Pay restraint should apply across the board and with salaries like half a million pounds they clearly haven’t. But don’t tell me, it’s ok for those at the top to get fat wages.

Ozanj · 04/02/2022 13:30

@RandomLondoner

The entire concept of the 4 day working week came from these alternative models.

Reducing economic output by making people work less sounds like a terrible solution to inflation. By contrast, the conventional solution of (say) working a 5-day week for 4 days pay reduces money in circulation without reducing output and wealth and material standards of living. (Well there's a reduction in standard of living from working 25% more, but apart from that...)

Money isn't wealth, total economic output is, and a 4-day week reduces the latter. It's literally a prescription for making the whole country poorer. (Nothing wrong with anyone who wants to working less, it's the idea of enforcing it as a societal norm that I don't like the sound of.)

It would increase productivity and it actually has in Japan and Germany where is used in certain industries. The theory didn’t come out of thin air. It’s being used successfully in high productivity countries!
TheReluctantPhoenix · 04/02/2022 13:35

@forinborin,

'Out of interest, how much do you think he should earn for what he's doing?'

About £150k.

It is a highly prestigious job in public service. He will be massively in demand by every investment bank after he finishes his stint and is guaranteed millions. Is that not enough?

ElftonWednesday · 04/02/2022 13:39

I know, it made me shout "Oh fuck off" this morning.

Porfre · 04/02/2022 13:42

Well the easy thing to do would be to hold any MP pay rises for the next 5 years.
And the same for the Bank of England employees. They can go for a pay decrease if they want.

For the rest of us in the real world who are actually wondering about how to pay our bill's or feed our kids, I'm actually looking into a job change because of this.

Porfre · 04/02/2022 13:43

@RandomLondoner

"Wage restraint" is not going to affect anyone on the minimum wage, which is the most hard-up group. For the rest of the population, inflation is caused by too much salary chasing too few goods, by definition that means there is too much spare spending money floating about.
And where is the spare spending coming from?

It's coming from the bank of England. They needed to have raised interest rates and they should have done it years ago but they cant because of the government debt.

forinborin · 04/02/2022 13:43

[quote TheReluctantPhoenix]@forinborin,

'Out of interest, how much do you think he should earn for what he's doing?'

About £150k.

It is a highly prestigious job in public service. He will be massively in demand by every investment bank after he finishes his stint and is guaranteed millions. Is that not enough?[/quote]
That's what a data scientist / quant in finance is on a couple of years post graduation these days. So eh, probably no, not enough.