Is the Bank of England for real here?

[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?

@MarshaBradyo

It has pissed people off re PR it’s not great

But are people saying it shouldn’t happen or that it shouldn’t be broadcast?

If the latter what’s a better way.. and in any case it’s going to hurt still even if more nuanced

Why is it always the folk at the bottom who get hammered when the wealthy cock up the economy and then refuse to contribute extra to help put it right? Poorer folk didn't screw up the energy market and why can't we do what France has done and tax companies that have extremely well out of privatisation, the pandemic and now rising energy prices?

Sunak, once again has decided not to make the wealthy pay but to shift the burden onto ordinary folk..

@forinborin

Economically, a rise in interest rates, whilst shit for us plebs, actually encourages more foreign investment which then floods the economy. True about the foreign investment, unless of course you also have that gift that keeps on giving, that wonder that keeps on reassuring foreign investors, that is Brexit.

Trickle down economics doesn't work.

Trickle down economics doesn't work.
I don't think I mentioned trickle down economics anywhere?

journalists did sensationalise them

of course & the context is often not important in terms of how the comments are perceived. That's why you don't expose yourself in the first place.

I think it was unnecessary, I doubt millions of people would be receiving inflation busting pay-rises this year even if they asked for them. How many employers not impacted by staff shortages were thinking of whopping pay increases for their staff but thought again upon ABs comments?

Why is it always the folk at the bottom who get hammered

There are more knowledgeable people posters in finance or economics on this thread but I knew it would be harder for lower down not the very wealthy, it’s awful to see and the sheer amount of spending has made me feel kind of depressed many times during the pandemic

The Bank of England is free from political control so that it can make decisions free from political repercussions. Wage rises are a source of inflation - hardly shocking news that pay restraint would help keep inflation low.

I can't think what good stating it will do though - firms are going to pay what they need to in order to attract and retain the people they need.

Jim O’Neill (economist) making good points this morning re if this is not controlled then it’s easy to end up in position of having to tighten monetary policy and then go into recession

They're not even trying to hide the fact now that they (UKGov and the "independent" BoE) want to keep ordinary workers wages suppressed whilst also pumping up asset prices, so they can have a nation of compliant, obedient, disenfranchised, debt slave worker drones.

Surely we all knew that the vast costs spent during lockdown would have to be recouped.

Wage freezes and rising payments were sadly inevitable.

The burden will always fall on the poorest because the better off can absorb price rises and can pay for alternatives when public services fail.

Why not introduce a salary cap - no one can earn more than, say £200k a year (including any bonuses or BIK)?

That won't happen, though, will it? As usual it will be the lower-paid people expected to further tighten their belts.

I understand he's applying a particular economic theory, but no one on a salary of half a million has the right to tell the person on the street not to ask for a payrise when money is being drained from us left, right and centre - energy bill increases, NI increasing - what are we supposed to do?

More of the same...Sunak and his mansion, with his plans approved for his new swimming pool complex.

He visited a local food bank....how dare he. His shoes cost more than the local people earn in a week.

Anyway, I thought Brexit meant higher wages.....

Surely we all knew that the vast costs spent during lockdown would have to be recouped.

and yet the banking surcharge has been cut from a current rate of 8% to 3%.

@ClariceQuiff Salary caps or wealth caps are not practical because the wealthier are the most mobile.

Successful people will simply leave and work elsewhere and tax take will be down.

@bindud Yes the banking surcharge was cut to make sure the U.K. was still internationally competitive.

Costs of lockdown were always going to be paid by ordinary people. This made it surprising to me that there was such enthusiasm for the country spending massive sums. Didn’t everyone realise it was being effectively borrowed from them and from their children?

@Flyonawalk again I'm aware of why the charge was in the budget to be reduced. However I think in light of economic conditions they could have delayed it or not reduced it by 5%.

Our economy was in difficulty before covid.

[quote Flyonawalk]@bindud Yes the banking surcharge was cut to make sure the U.K. was still internationally competitive.

Costs of lockdown were always going to be paid by ordinary people. This made it surprising to me that there was such enthusiasm for the country spending massive sums. Didn’t everyone realise it was being effectively borrowed from them and from their children?[/quote]
Everyone happily enjoying their nice life on furlough, making banana bread… it’s all going to bite them on the bum now.

YABU even if true it was a stupid statement.

Didn’t everyone realise it was being effectively borrowed from them and from their children?

well as you say it won't be everyone paying for it.

Everyone happily enjoying their nice life on furlough, making banana bread… it’s all going to bite them on the bum now.

what was the alternative to furlough if you are trying to prevent people from going to work & keep them contended so there is no civil unrest to limit the spread of a virus during a pandemic?

@HopeLa

More of the same...Sunak and his mansion, with his plans approved for his new swimming pool complex.

He visited a local food bank....how dare he. His shoes cost more than the local people earn in a week.

Anyway, I thought Brexit meant higher wages.....

This. Yes, how dare he.

This made it surprising to me that there was such enthusiasm for the country spending massive sums. Didn’t everyone realise it was being effectively borrowed from them and from their children?

I don't think they did realise that, no.

It suited the government not to spell it out too clearly and the people weren't putting 2 and 2 together in their desire to be 'kept safe'.

Those on high wages will still get the bonuses/share profits/pay rises etc. it’s us on average or below average where our pay hasn’t increased for many years or have been minimal pay rises way under inflation which will bear the brunt.

It may make economic sense on paper and to those In the know. But I’m a HCP on 24K I won’t pretend to fully know the ins and outs. But you can be bosses will now be quoting the BoE and using that as a way of not raising pay even those small amounts like 1% for cost of living etc which we know don’t even touch the sides.

He’s right though, his job is to control inflation. A fortune was paid to people to produce nothing but carry on consuming, this was all pointed out back in lockdown times. The bill’s arriving now, no point shooting the messenger.

@bindud You ask ‘what was the alternative to furlough?’ In the context of lockdown there went one. But there was an alternative to lockdown, which was continuing to run the country and not saddling the poorest and youngest with the costs of it.

*wasn’t one, not went one

But we weren't with lockdown so furlough was the only option.