Bank of England increases key interest rate to 0.5 %, governor Andrew Bailey points out wage restrictions - Economics
Bank of England increases key interest rate to 0.5 %, governor Andrew Bailey points out wage restrictions - Economics
The Bank of England (BoE) has increased the country's key interest rate from 0.25 % to 0.5 % this week in order to curb the rampant inflation. "We are faced with a compromise between strong inflation and weakening growth," said the governor of the British central bank, Andrew Bailey, the press. When asked by a BBC reporter, whether Boe members would ask British citizens not to demand salary increases, Bailey replied: "On the whole, yes."
Boe increases interest rates for the second time since the beginning of the Covid 19 pandemic, the governor of the British central bank says: "We have to hold back in wage negotiations"
After the meeting of the Boe's monetary policy committee, the bank announced that four of the nine committee members wanted to increase the interest rate to 0.75 %. However, the majority of committee members, including governor Andreas Bailey To increase 0.5 %. After the climb, the British pound reached a two -year high compared to the euro, and British government bonds were sold out on Thursday during the afternoon trading sessions.
"We expect a very clear reluctance in the negotiation process, because otherwise it will get out of control," says Bailey explains in an interview on BBC Radio 4. "I don't say that nobody gets a salary increase, don't understand me wrong, but I think what I want to say is that we have to hold back during wage negotiations." The BBC reporter then asked the boe governor whether the British working class should stop demanding higher wages, and Baily replied: "On the whole yes." Bailey's comments continued when he said:
"This is painful. I don't want to fuck this message in any way. It is painful. But we have to see that to solve this problem faster."
former member of the BoE committee for monetary policy: "Employees in the public sector have frozen their wages for a decade"
Professor Danny Blanchflower from Dartmouth College, a former member of the Monetary Policy Committee (MPC) of the Boe from 2006 to 2009, said on Twitter that governor Andrew Bailey was unsuspecting. "Just as the real wages become very negative, the unsuspecting Bailey tells the workers that it is their fault [and] less salary, even though he does not want it," explains Blanchflower tweeted . "Employees in the public sector have frozen their wages for a decade of Tory rule, what is that for a world-time for the workers to tell him that he should disappear."
let me show me in a diagram why the MPC decision is a catastrophe-here the employment rate in November 2021
full employment, scarce job market is my hat pic.twitter.com/8carvxrjyy- Professor Danny Blanchflower, Economist and Fischer (@d_blanchflower) 3. February 2022
Markets.com-Analyst Neil Wilson also criticized Bailey's statements not to demand any wage increases. "The governor of the Bank of England, Andrew Bailey, says we can make our contribution to combating increasing inflation by not demanding any wage increases," said Wilson Schrieb . "To come from someone who has slept at the wheel for the past 18 months is not exactly helpful. How about your work? By that I mean to get the inflation under control before using it - which would have meant a gentle tightening last summer. It's a shame that this moment was lost."
What do you think that the BOE raises the reference interest rate? What do you think that Andrew Bailey recommends that the British working class should stop demanding higher wages? Share your opinion on this topic in the comment area below.
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