The chief economist of the Bank of England, Huw Pill, has stated that the British public must acknowledge that they are poorer, or else prices will continue to increase.
During a podcast in the US, Pill explained that there is a reluctance to accept that everyone is worse off.
He said: “If the cost of what you’re buying has gone up compared to what you’re selling, you’re going to be worse off.
“So somehow in the UK, someone needs to accept that they’re worse off and stop trying to maintain their real spending power by bidding up prices, whether higher wages or passing the energy costs through on to customers.
“And what we’re facing now is that reluctance to accept that, yes, we’re all worse off, and we all have to take our share.
He added that in response to rising bills and other costs, workers are requesting higher wages, and businesses are charging more.
The UK’s inflation rate, which is the rate at which prices rise, was at 10.1% for the year up until March. Although the rate has decreased slightly since then, prices are still rising at a slower pace.
According to Pill, demands for higher pay and businesses increasing prices contribute to inflation and cause prices to rise even more across the economy. Additionally, key workers, such as nurses, hospital staff, and train drivers, have gone on strike due to disputes with the government over pay during the cost-of-living crisis.
Pill urged the UK public to stop trying to maintain their real spending power by bidding up prices and to accept that everyone must take their share of the cost, rather than passing it onto others.
He explained that the pass-the-parcel game that’s currently occurring is generating inflation, and this aspect of inflation can persist.
It is reported that Mr Pill was paid £88,000 for his first five months and 24 days at the Bank of England, taking his annual salary to £180,000.
