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?

And this is why he is in charge of BOE monetary policy and you are not. The role needs someone who can see past the 'me me me, I want more' attitude and is able to put forward un popular policies that could be successful in their aim.

Out of interest OP, what would you do instead to rein in inflation?

Out of interest OP, what would you do instead to rein in inflation?

Well the BOE has managed this yet...

hasn't

Seems sensible to me.

Yanbu. Incredibly tasteless coming from a banker especially one on his salary.

Bank salaries and bonus structure are a huge part of why houses are so expensive in the UK. I’d suggest banks stop paying crazy salaries but everyone else should do what they want.

@bindud

Out of interest OP, what would you do instead to rein in inflation?

Well the BOE has managed this yet...

That's whattabootery but not an answer to the question is it?

You don't agree that their proposal is the correct path to take so what is your better suggestion?

You don't agree that their proposal is the correct path to take so what is your better suggestion?

I was interested too

That's whattabootery but not an answer to the question is it?

You don't agree that their proposal is the correct path to take so what is your better suggestion?

I think you are confusing me with another poster.

Going back to the OP, yesterday I said it was dreadful PR to say what he said. I've not changed my mind.

There is not other option but to raise interest rates (but I don't think that's the OP). I expect another increase fairly soon.

@Mynameisnew

The massive wage disparity I just don't understand. Half a million quid? Why?!

Skills, specialist knowledge and training, qualifications, experience, intellectual ability.

@bindud

I'm certainly not an outlier in finding the BOEs decisions questionable looking at all the press & even no 10 has disagreed with the pay restraint point so as I said dreadful PR.

Lol. Boris wants to keep his job. I wouldn't be looking to him for economic advice if I was you!

@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.

🤣🤣🤣🤣

Indeed! 🤦🏻‍♀️🦶🏻🔫

Let me risk a kicking by bravely jumping into the fray to answer “what is yoyr better suggestion?”

Say nothing. Let it be known in business magazines to the leaders of industry what you need to happen-don’t worry they got the memo years ago during which time people haven’t had payrises. Get a clue - telling the average person in the street to not ask was foolishness that riled up a huge amount of people for no reason.
Use your superior experience , skills and intellect to not kick people in the guts on the same day huge increases in energy prices happen. Oh and tax the massive companies not currently paying tax.

@HollyRD

I though a be fit of Brexit was that wages would go up.....

Lol!!!!

Hey, it is the UK we like to keep the income inequality as high as possible.

BoE and the Government have choices; do they keep the rich happy, do they keep the poor fed, do they acknowledge the limits to growth, do they want to be re-elected in a couple of years. You can't meet all of these choices.

Skills, specialist knowledge and training, qualifications, experience, intellectual ability

The ones who claim that is the case are also the ones who benefit from such claims.

The disparity is too big.

The thing to remember that the people on excessively high salaries are not special. They’re just ordinary human beings who’ve ended up on that path. I’ve met many people on six figure salaries and used to be intimidated but then a light bulb went off and I realised that yes they may “know” more things in certain areas, but given equal opportunities, so may others could take their place.

@Iwonderifiwonderwhy

Yanbu. Incredibly tasteless coming from a banker especially one on his salary.

Bank salaries and bonus structure are a huge part of why houses are so expensive in the UK. I’d suggest banks stop paying crazy salaries but everyone else should do what they want.

He's not a banker, he's a civil servant. And actually turned down his bonus last year.

@Changedmane

Let me risk a kicking by bravely jumping into the fray to answer “what is yoyr better suggestion?”

Say nothing. Let it be known in business magazines to the leaders of industry what you need to happen-don’t worry they got the memo years ago during which time people haven’t had payrises. Get a clue - telling the average person in the street to not ask was foolishness that riled up a huge amount of people for no reason.
Use your superior experience , skills and intellect to not kick people in the guts on the same day huge increases in energy prices happen. Oh and tax the massive companies not currently paying tax.

Well, I think, it has not been aimed at the average person, or even the average employer. I think it was a message to the government, made as clearly and as publicly as possible without being accused of meddling in politics, not to resort to short-term popular measures such as an emergency increase in the min wage, for example (or some equivalent). Well, it is my reading of the situation.

What do you expect from the hopelessly corrupt banking sector? Morals? Caring about people and fluffy-wuffy bunnies?

Why on earth should the public do his job for him and not ask for pay rises to control inflation, he has had ample opportunity to control inflation, but instead he has been praying that inflation is 'transitory' and hoping it will just go away whilst everyone else said it wouldn't

@bindud

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.

Yep. Sneaky way of introducing a new tax that will also go up and up. When this was what NI was meant to cover?

Previous generations spent all of the windfalls, enjoyed the dividends in their defined benefit pension funds, while cutting public services to the bone. And then to fund those pensions, on top of the financial crisis and recession and pandemic, has meant very low salary growth for those working.

Companies will have to be forced to increase salaries to a workable level. Even an inflationary increase this year won't cut if after 10 years of accumulated inflation and wage stagnation. Usually when going into a period of economic hardship there has been a boom beforehand so people have had a chance to save and improve their situations beforehand. Not this time.

It is PAYE workers being screwed over again and again because there's no excape for them while the self employed and (even small) business owners get taxed SO much less. A level playing field must come now. Employees have already reached the limit of how much they can be squeezed.

It is taxes on businesses and capital gains tax, dividend tax that need to go up. Not another payroll tax, or another tax on employee pensions. They do this because it's easy, the easy targets. People need to write to their MPs. If they get enough complaints then they get scared they won't be re-elected and they speak up. It's the only way.

Ask them why an employee gives up 32% of income at basic tax rate level, or 41% with student loan on top. Still on an under-average income. Why? When capital gains tax is 20%? Dividend tax rates start at 7.5%.

This is what distorts the economy the most atm. House prices are a problem but a red herring if you want change. Start taxing those with CAPITAL. It's not about earnings. And it doesn't need to be a wealth tax like they had in France and other countries which is totally unworkable and includes the value of people's homes who have no actual money and makes people homeless. Just raise capitals gains tax and dividends taxes to the rates of income taxes. The mechanism is there already.

Of course our current Government - and especially Sunak!!!! - would never contemplate this.

He's not a banker, he's a civil servant

Nominally, yes; the Governors also appointed by the Chancellor of the Exchequer - in other words yet another political appointment

@bindud

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

Blame the Brexit voters for that.

Your comments at @vickyc90 are disingenuous. She doesn't have to say "given the Government's lockdown strategy" what would have had less catastrophic, obvious results later (now). She is perfectly entitled to say that the Government should have a) closed borders until we knew what we were dealing with (not "oh sorry, Boris is on holiday with Carrie so can't go to Cobra meetings" 😒😆🙈), then protected the vulnerable and carehomes and fewer people would have died AND the economy wouldn't be so fucked. The evidence was there at the start. Many people (including me) said this and were shouted down.

So yeah, like with Brexit, the scale of this damage is a self-inflicted wound. And people are right to point it out and say, why should I or my children be the ones paying when I never agreed with this strategy in the first place, because all of the epidemilogical evidence at the time said it was madness?

@Puzzledandpissedoff

He's not a banker, he's a civil servant

Nominally, yes; the Governors also appointed by the Chancellor of the Exchequer - in other words yet another political appointment

All senior Civil Service posts are by definition appointed by the Government?! Obviously. You and the other poster who seemed to think there are no interviews for roles at this level are clearly nowhere near these processes and have no idea how they work. I'm not big fan of AL as it happens but he went through a rigorous process to get that job. You think people appoint you on £575k without doing any homework or interviews or challenging you first? Dreamland.

You and the other poster who seemed to think there are no interviews for roles at this level ...

Why on earth would I imagine there were no interviews or "homework" done?
And how on earth does that negate the issue of political interference in such matters?