The consensus that has prevailed for the past 40 years told us that monetary policy must be depoliticised, so that central banks can independently pursue the goal of price stability in the economy without catering to politicians, private finance or corporations. Andrew Bailey, the governor of the Bank of England, threw that impression aside last week when he suggested that workers should not demand higher wages in order to contain the inflationary pressures confronting the British economy in 2022.
“I’m not saying nobody gets a pay rise” he said. But “we do need to see restraint in pay bargaining, otherwise it will get out of control”.
