Andrew Bailey has awarded an inflation-beating pay rise to Bank of England staff, despite repeatedly telling workers they should not demand large wage increases.
The Bank’s 5,000 staff will receive an average salary boost of 4pc in the twelve months from March this year.
This is significantly higher than Threadneedle Street’s own forecasts for inflation, which it expects to fall to 2pc in spring before rising slightly again and ending the year at 2.75pc.
Mr Bailey has previously faced criticism for telling workers they should not ask for a big pay rise, despite the cost of living crisis.
The Bank’s chief economist Huw Pill also landed in hot water after suggesting Britons had to accept they were poorer following the energy crisis.
It comes as traders are betting that interest rates in the US will fall in the summer after the latest jobs figures indicated that hiring is slowing down across America.
Money markets are pricing in that the US Federal Reserve will make its first quarter of a point interest rate cut in June after data showed hiring is moving at a much slower pace than previously thought.
Non-farm payrolls increased by 275,000 in February, according to the US Labor Department, which was ahead of previous estimates of 200,000.
However, past estimates on hiring were dramatically revised down by 43,000 and 124,000 respectively from 333,000 to 290,000 in December and 353,000 to 229,000 in January, signalling that the US economy is performing much worse than previously thought.
The pound is the only major rich country currency to strengthen against the dollar this year, amid hopes of imminent rate cuts in the US from a weaker economy and the UK bouncing back from recession.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
