Closing summary
Time to wrap up...
The governor of the Bank of England has come under fire from unions and earned a rebuke from 10 Downing Street for suggesting workers should not ask for big pay rises to help control inflation.
Andrew Bailey said he wanted to see “quite clear restraint” in the annual wage-bargaining process between staff and their employers to help prevent an upward spiral taking hold.
However, his comments drew a furious response from union leaders, as households face the worst hit to their living standards in three decades as soaring energy prices cause inflation to outstrip wage growth.
Sharon Graham, the general secretary of Unite, said workers did not cause Britain’s cost of living crisis and should not be asked to pay for it. “Why is it that every time there is a crisis, rich men ask ordinary people to pay for it?” she said.
“Enough is enough, we will be demanding that employers who can pay, do pay. Let’s be clear, pay restraint is nothing more than a call for a national pay cut.”
Bailey was paid £575,538, including pension, in his first year as the Bank’s governor from March 2020, more than 18 times the UK average for a full-time employee.
In a sign of a rift between the government and the Bank, the prime minister’s official spokesperson said pay restraint was not something he was calling for.
“We obviously want a high-wage, high-growth economy, and we want people’s wages to increase,” he said.
“We recognise the challenge of the economic picture which Andrew Bailey set out; but obviously it’s not up for government to set wages or advise on the strategic direction or management of private companies.”
As the Bank raised interest rates to 0.5% on Thursday to tackle inflation, it warned household disposable incomes were on track to shrink by 2% this year, the biggest fall since comparable records began in 1990.
It comes after the worst decade for average pay growth since the Napoleonic wars, with inflation-adjusted pay still below the pre-2008 financial crisis peak.
In other news today...
Oil has hit a seven-year high, with Brent crude and West Texas Intermediate both pushing further above the $90/barrel mark. The move pushed up Shell and BP’s share prices, but threatens further pain for motorists and companies, pushing up transport costs and some heating bills.
The US economy has appeared to shake off the Omicron variant in January as employers added 467,000 new jobs, much more than economists had feared.
Great Britain’s energy regulator is proposing to update the energy price cap as often as every three months as it braces for further volatility across global markets.
Households can expect their water bills to rise to an average of almost £420 a year from April, compounding a record rise in energy costs and an increase in national insurance contributions that are due in the same month.
MPs have called for a national road pricing scheme in which motorists will have to pay by the mile to make up a £35bn tax shortfall that will arise from the shift to electric vehicles.
The carbon dioxide emissions of new cars sold in the UK dropped to the lowest level ever in 2021 thanks to the unprecedented surge in electric vehicle sales, industry data suggests.
Average new car CO2 emissions fell by 11.2%, to 119.7g for every kilometre driven, according to the Society of Motor Manufacturers and Traders (SMMT), a lobby group.
The owner of the Upper Crust sandwich chain has reported a drop in sales as concerns about the Omicron coronavirus variant kept customers at home but said it was hopeful of better performance as commuters return to offices.
The UK film and TV industry has bounced back spectacularly from the pandemic with a record £5.6bn spent making blockbusters such as Mission: Impossible 7 and big-budget dramas including Bridgerton in the UK last year.
Shaftesbury, which owns swathes of Chinatown, Soho and Covent Garden, said West End crowds were returning despite the Omicron variant, with the prospect of an extended period of uninterrupted trading.
Goodnight. GW
Updated
The Daily Telegraph are reporting that the Bank of England is going to face demands for a ‘very substantial’ pay increase for its own workers later this year, or risk losing them.
Trade union Unite, which represents almost 600 of the Bank’s staff, recently accepted a 1.5% pay increase this year that is due to take effect from April.
But Mr Bailey now faces a pay revolt on his own doorstep after the union’s regional officer, Steve O’Donnell, said:
“Unite will be seeking a very substantial increase for workers at the Bank of England when pay talks resume later this year. [They] are suffering the same cost of living crisis as everyone else and Andrew Bailey can’t ignore the needs of his own staff.
“A failure to address pay will result in workers voting with their feet and seeking alternative employment where they are properly appreciated and remunerated.”
EXC: Unite is going to push for a "very substantial" pay rise for almost 600 Bank of England staff as Andrew Bailey faces a pay revolt on his own doorstep. Bank staff are only getting 1.5pc from April as inflation pushes past 7pc https://t.co/ebOBCq4Iom
— Russ Lynch (@russ_lynch) February 4, 2022
