Bank of England dishes out £25m in bonuses despite Andrew Bailey demanding wage restraint
The Bank of England has dished out tens of millions of pounds in bonuses despite Governor Andrew Bailey and other senior officials demanding workers accept real terms pay cuts.
Threadneedle Street rewarded staff with a total of £25m in one-off handouts over the last year, up from £23m in the previous year, according to a freedom of information (FOI) request filed by Opendemocracy.
Last year’s bonus bump comes after Bailey last month branded the current pace of wage growth as “unsustainable” and must cool down to curb inflation.
Wage increases have been outstripped by inflation for more than a year and a half, meaning workers have undergone a prolonged fall in their living standards.
Huw Pill, the Bank’s chief economist, also drew sharp criticism earlier this year when he said workers “need to accept” they are poorer as a result of increasing prices.
New figures out this morning from the Office for National Statistics are expected to show the cost of living is still gripping family finances.
Average pay at the Bank is £62,189, while Bailey is on about £500,000 a year. Average income after taxes and benefits in the UK is £38,100. Bailey passed up a pay rise last year.
A Bank of England spokesperson said: “For this year, the Bank has given a 3.5 per cent pay award to its staff,” which is below the UK average of 7.3 per cent, according to latest ONS numbers.
Bonuses were calculated as the same share of pay as last year, the Bank said, suggesting the £2m pool expansion was down to an increase in staff.
Stepping up performance-based rewards is likely to attract scrutiny due to the Bank’s poor track record in taming inflation.
The last time the central bank reached its two per cent inflation target was July 2021. Inflation peaked at 11.1 per cent in October 2022.
“There is no question of the Bank unduly rewarding its staff,” the spokesperson added.