‘Accept we’re all worse off’ says Bank economist
Huw Pill said the Bank was ‘not alive’ to supply chain pressure
A Bank of England official says British people have to accept that rising prices have made everyone “worse off” and seeking higher wage rises is adding to the problem.
Wages continue to rise but are struggling to keep pace with inflation which remains stubbornly above 10%.
Huw Pill, the Bank’s chief economist, said on a podcast that “someone needs to accept that they’re worse off and stop trying to maintain their real spending power by bidding up prices, whether through higher wages or passing energy costs on to customers etc.
“What we’re facing now is that reluctance to accept that, yes, we’re all worse off and we all have to take our share.”
Mr Pill was speaking to the ‘Beyond Unprecedented’ podcast, produced by Columbia Law School.
Last year, the Bank’s governor Andrew Bailey suffered a backlash after urging workers not to ask for big pay rises. He later called for demands to be moderated.
Mr Pill also addressed criticism of the Bank’s handling of inflation, admitting that it was not alive to the dangers of blocked global supply chains and the effect that would have on pricing.
“If we had understood supply chains better than we did. We could have probably understood that this was going to be a more difficult process than we anticipated,” he said.
Earlier, the Bank’s deputy governor Ben Broadbent defended its record and denied that raising interest rates earlier could have made a meaningful difference.
Mr Broadbent said: “If we had started three, four, five, six months earlier [there would have been], I don’t know, maybe a maximum of half a point less inflation.”