Bank of England Governor Andrew Bailey admitted his chief economist was wrong to make controversial comments suggesting that Britons must accept they are worse off.
(Bloomberg) — Bank of England Governor Andrew Bailey admitted his chief economist was wrong to make controversial comments suggesting that Britons must accept they are worse off.
Bailey said the UK cannot escape the economics of a “very big hit to national income” after the central bank’s Chief Economist Huw Pill was criticized and made the front pages of newspapers for the remarks.
Pill sparked outrage last month by suggesting that people need to accept they are worse off and stop a “pass the parcel game” that is fueling more persistent inflation.
“I don’t think Huw’s choice of words was the right one in that sense I have to be honest and I think he would agree with me,” Bailey said Thursday in the press conference following the BOE’s monetary policy decision. “What I’m afraid we can’t duck is this very big hit to national income which we have to deal with.”
Bailey’s reaction came as the BOE pushed up borrowing costs for households and firms again by backing a 12th consecutive hike. It lifted its key lending rate a quarter point to 4.5%.
The governor said the “economics of the hit to national income are clear” but added that the BOE is “very sensitive” to the position of UK households during the cost-of-living crisis.
Read more:
- BOE Chief Economist Says UK Needs to Accept It’s Worse Off
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