Cost of living crisis hits household confidence; UK trade with Germany falls; FTSE 100 at two-year high – as it happened

Lorries queue for the Port of Dover in Kent, as the Dover TAP is enforced due to the high volume of lorries waiting to cross the Channel. Photograph: Gareth Fuller/PA

5.54pm GMT

Closing summary

Time to wrap up, here are today’s main stories:

Goodnight. GW

5.43pm GMT

Bank of England boss urged to shadow care worker for a day amid low pay row

One of Britain’s largest trade unions has invited the governor of the Bank of England to work as a care worker for a day to witness how people cope on low pay.

The GMB, which represents about 500,000 full and part-time workers, said Andrew Bailey should see first hand the challenges of making ends meet for people struggling on below average earnings – many of them low-paid women working in the care sector – after the central bank governor called for wage restraint to limit the rise in inflation.

Bailey caused uproar last week when he suggested that workers should help curb inflation by refraining from making wage demands, on the same day the Bank of England announced the biggest fall in disposable income in three decades.

The central bank forecast that inflation, which increased to 5.4% in December, was on course to hit 7% in April while its latest estimates found that earnings were increasing by 4% to 4.5%.

Bailey said interest rates would need to rise further if wages increased in line with inflation, causing unemployment to rise and economic growth to slow.

More here:

Chief economist Huw Pill touched on this issue today, when he said the Bank would act if it became concerned that the jump in energy prices and imported goods was driving up wages or prices:

In an attempt to protect their own real income from the unavoidable impact of higher external prices, the longer that firms try to maintain real profit margins and employees try to maintain real wages, the more likely it is that domestically-generated inflation will achieve its own self-sustaining momentum even as the external impulse to UK inflation recedes.

Huw Pill, chief economist to the Bank of England, has said that wages need to fall in real terms this year to keep inflation under control. I ask, why do we give people like him the power to impose this view from the world of banking on us all? https://t.co/SNDs06tHeP

— Richard Murphy (@RichardJMurphy) February 9, 2022