BOE: British people should accept they are poorer

Bank of England’s (BOE) top economist, Huw Pill said “people in the UK need to accept that they are poorer, otherwise prices will continue to rise,” according to BBC  published on Wednesday.

A game of pass the parcel of workers asking for wage rises and businesses passing on higher costs was fuelling inflation, while there is a reluctance to accept households were worse off, Pill added.

“Somehow in the UK, 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,” Pill stated.

Pill’s comments have sparked backlash from small businesses and unions, calling him them out of touch.

“Small firms had been left with no choice to pass on the huge increases they have seen for energy and input costs to customers, in many cases even that is not enough to fill the gap, many firms who are only just hanging on day by day, were not able to invest and were cutting costs,” Tina McKenzie, policy chair of the trade body said.

Pill has made £95,183, including benefits, in his first six months at the central bank, and is paid over £190,000 a year.

UK inflation reached 10.1 percent in the year to March, while being lower in February, part of the Bank of England’s role is to try to keep inflation at its target rate of two percent.