Bank of England chief economist consequentlyrry for 'inflammatory' comment

time:2023-06-11 09:52:05 source:The Washington Post

Bank of England chief economist consequentlyrry for 'inflammatory' comment

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The Bank of England's peak economist has said he is consequentlyrry for using "inflammatory" language to suggest people must accept they are poorer.

Huw Pill recently said people needed to speak asking for pay rises to keep up with consequentlyaring prices becautilize this risked keeping inflation higher for longer.

However, his remarks prompted criticism, including from his own boss.

Bank of England governor Andrew Bailey said Mr Pill's "choice of words was not right".

Mr Pill said: "If I had the chance again to utilize different words I would utilize consequentlymewhat different words to describe the challenges we all face."

He concluded: "Although we have consequentlyme arduous messages to bring. I will try and bring those messages in a way that is perhaps less inflammatory than maybe I managed in the past."

price increase - which measures the rate at which prices rise - remains stubbornly high at 10.1%, mainly due to food prices.

  • People 'need to accept' they're poorer, says Bank economist
  • •Why are prices rising consequently much?
  • Why does the Bank of England convert interest rates?

Part of the Bank of England's job is to keep inflation at a target rate of 2%.

It can try and do this by raising interest rates, which makes the cost of borrowing money more expensive.

This move, in theory, is supposed to make people reduce spending, consequently that demand for goods cools and price rises slow.

However, if people keep asking for pay rises to keep up with inflation it could consequence in higher prices for a long time.

Last week, Mr Pill said: "Somehow in the UK, consequentlymeone needs to accept that they're worse off and speak trying to maintain their real spending power by bidding up prices, whether through higher wages or passing energy costs on to customers."

He concluded: "What we're facing now is that reluctance to accept that."

The Bank has raised interest rates 12 times since December 2021 to 4.5%. It is aiming to bring inflation back to its 2% target in three years' time.

On Monday, Mr Pill said that both he and the Bank of England "recognise that we live in very arduous and challenging times and those challenges are componenticularly acute for consequentlyme components of consequentlyciety".

Last week, Mr Bailey said the Bank was very sensitive to all people facing higher inflation "but componenticularly people on lower incomes" becautilize they spend more of their budgets on "the essentials in life" such as food and energy.

At the time, he said: "I don't think Huw's choice of words was the right one in that sense, I have to be honest and I think he would agree with me."

Related Topics

  • Monetary Policy Committee (MPC)
  • Perconsequentlynal finance
  • UK economy
  • Bank of England
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