Warnings on wage rises contributing to UK’s high inflation draw outrage
LONDON - Huw Pill, a senior economist from the Bank of England, has commented that people in the UK need to accept that they are poorer, otherwise prices will continue to rise.
He told a US podcast that there is a "reluctance to accept that, yes, we're all worse off", in response to higher bills and other costs as workers are requesting wage increases and businesses are charging more.
UK inflation, the rate at which prices rise, was at 10.1% in the year to March; this figure dropped last month to 10.4%, but this doesn't mean prices are decreasing. The Bank of England's job is to keep inflation at its target rate, so in response to rising prices they increased interest rates, making the cost of borrowing more expensive.
This move, in theory, is meant to make people reduce spending, so that demand slows down and prices rise at a slower pace. With households facing high energy bills and food costs, many workers are asking for pay rises to ease the pressure on their budgets. Job vacancies have been falling, but are still higher than they have been for decades, giving people more leverage as they request higher wages.
Images by Timur Valiev and Samuel Regan-Asante
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