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?

went 😆

The bill’s arriving now, no point shooting the messenger.

The bill was coming before Covid. The tax rises were inevitable with the ageing population, the state of the NHS & social care. And let's not forget Brexit.

The new h&s levy won't cut it & I expect it will increase.

@Mirrorball2022

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.

Agree with this 100% .

@Dogsandbabies

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.

Surely those earning more so because they are worth it. Be that a good plumber, doctor or politician, why should they not expect their wages to keep up with inflation. What your asking is them to do the same for less to make it easier on the lower wage earners by slowing price rises. It's like the whole help with energy bills once again higher rate tax payers are subsidising those who don't pay the same into the system.

We got where we are by going to university, doing a years unpaid internship then working our way up the ladder. I have no problem with paying by fair share but that share seems to get bigger every year yet we get less back out of the system.

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'd say it was more that some didn't want to realise, which may explain the resentment and insults flung at those who pointed out the facts at the time

Considering the damage that's been done there's no satisfaction at all in what's happening now; nobody in their right minds wants to be proved right at such a cost, but it's just a hell of a shame that so many didn't seem to consider what would inevitably happen

@bindud

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?

Don't limit the spread of the virus, lockdown they the CEV and set up proper surge hubs in hospital grounds.

@vickyc90 No my question was, what was the alternative to furlough when the gov chose the lockdown strategy they did?

Whether you believed in lockdowns or not the point is the strategy the gov chose meant a scheme like furlough was necessary.

Plus it's deflection, as I've repeatedly said the economy was not in good shape before covid & tax hikes were inevitable.

We got where we are by going to university, doing a years unpaid internship then working our way up the ladder.

😆 I got where I am because of my parents & the schools they chose for me & the large deposit they gave me to get on the ladder

And the NI hike is far more favourably to those earning higher salaries.

@ShadowPuppets

It’s one of those economics points which makes perfect sense if you are talking about it in a lecture theatre or an academic journal. Unfortunately, when choosing between heating is already a reality for people and it’s about to become so for millions more, it’s not just tone-deaf, but crass and offensive.

This

I've repeatedly said the economy was not in good shape before covid & tax hikes were inevitable.

So you don't think borrowing 69 billion for furlough made any difference? Really?

That's not that I think furlough was a bad idea, but it should have been obvious at the time that paying for it was going to be immensely painful. I don't think that went in for many people.

YANBU. Wage-price spirals are sound economic theory but the delivery was tone deaf. A significant section of the population is going hungry and cold. People are facing financial ruin despite two full-time incomes and the safety net has massive holes in it.

It feels like ordinary people are constantly being told that everything is their fault. Brexit? Your fault for being xenophobic and gullible. Covid? Your fault for daring to leave the house. Covid restrictions? Well, if you'd only behaved yourselves then they wouldn't be needed. Rocketing inflation? Your fault for asking for enough money to live.

It's never the fault of the people whose job it is to govern the country and the manage the economy. Johnson, Sunak, the governor of the BoE: all quite happy to tell us what to do, as long as it doesn't affect them at all.

The guy is a total dick expecting poorly paid people to put up with even more erosion of living standards while earning half a million quid a year himself

@TheKeatingFive where did I say it didn't make a difference? I said the tax hikes were coming regardless.

And again I wasn't furloughed but I can understand why the scheme was utilised considering the path the government chose.

@bindud

We got where we are by going to university, doing a years unpaid internship then working our way up the ladder.

😆 I got where I am because of my parents & the schools they chose for me & the large deposit they gave me to get on the ladder

I wish our first house deposit was 7k (95% mortgage) on a house too small for our needs. Which we saved in addition to solicitors fees and furniture.

We have spent the last 7 years over paying that mortgage and saving 30k in addition to the equity to afford the house we have now.

I think wages should keep pace with inflation, especially for those on middle incomes who are set to lose the most in terms of quality of living if they dont. I also think those who claimed furlough should face paying it back like businesses are being forced to, not the people who continued working anyway.

The tax thresholds also need to rise with inflation so those paying the most don't end up paying even more plus no council tax rebate (ours is 2.5k!). The current NI insurance increase, wage freeze and inflation will cost us thousands but that's okay because we can afford it, yes we can but it's not fair! I would rather go to digitalis than be a burden so we won't see the benefit of the NI increase either.

The big contributor to inflation is the cost of raw materials and energy maybe we should start fracking and build some nuclear power stations to off set the cost.

I said the tax hikes were coming regardless.

And they'll have to be more substantial and long term as a result of furlough, yes?

The tax thresholds also need to rise with inflation so those paying the most don't end up paying even more plus no council tax rebate (ours is 2.5k!).

Well they've been frozen for 5 years I believe.

@TheKeatingFive

I said the tax hikes were coming regardless.

And they'll have to be more substantial and long term as a result of furlough, yes?

They don’t have to be. The government could chose how it structures its debt - debt which is welcomed by investors by the way because it’s somewhere safe to invest - and smooth it over a longer term.

Then use that longer term to actually make the right sorts of investment - in education and public health and encourage the growth of the economy so that the country becomes richer.

A rough analogy would be taking out a mortgage, getting your head down and studying, getting a decent job so your salary grows and your mortgage becomes less of a proportion of your salary.

Our government is being far too short term in its approach and we keep going backwards as a result.

And they'll have to be more substantial and long term as a result of furlough, yes?

The pandemic will have an impact of course. Not just furlough, but track & trace, PPE, etc. I'm not sure if not furloughing people & having mass unemployment would cost less, I would argue it would cost more.

The monetary policy that many central banks have relied on also impacts inflation. And Brexit has likely had a bigger economic impact than Covid.

@RishiRich

YANBU. Wage-price spirals are sound economic theory but the delivery was tone deaf. A significant section of the population is going hungry and cold. People are facing financial ruin despite two full-time incomes and the safety net has massive holes in it.

It feels like ordinary people are constantly being told that everything is their fault. Brexit? Your fault for being xenophobic and gullible. Covid? Your fault for daring to leave the house. Covid restrictions? Well, if you'd only behaved yourselves then they wouldn't be needed. Rocketing inflation? Your fault for asking for enough money to live.

It's never the fault of the people whose job it is to govern the country and the manage the economy. Johnson, Sunak, the governor of the BoE: all quite happy to tell us what to do, as long as it doesn't affect them at all.

Well said

Then use that longer term to actually make the right sorts of investment - in education and public health and encourage the growth of the economy so that the country becomes richer.

We have had no where near enough investment in the country & productivity growth is so slow.

Wow, how things have changed. 18 months ago, most mumsnetters thought Rishi was some kind of demi god.

That was when he was throwing cash around though 😂. Now it's got to be paid back attitudes have hardened.

They don’t have to be. The government could chose how it structures its debt

I think it's pretty naive to suggest you can structure your way out of the immense costs of lockdown in some way that doesn't impact the taxpayer base significantly. The potential for interest rates to rise or national credit ratings to be affected are huge risks in this kind of approach.

I understand why people want it to be true of course, but the truth is there would never be any easy fix to paying back the huge costs of lockdown.