Bank of England

2022 - 5 - 17

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Image courtesy of "The Independent"

'Think and reflect' before seeking pay rise, says £575000-a-year ... (The Independent)

'It's a societal question but I am not preaching about this' says governor Andrew Bailey.

Why is it that every time there is a crisis, rich men ask ordinary people to pay for it? Why should they be expected to pay for the failures of the energy market and the total shambles of government policy? “Enough is enough, we will be demanding that employers who can pay, do pay. Mr Bailey told MPs on the Treasury select committee: “I spoke in an interview about this. Unite general secretary Sharon Graham said: “Yet again workers are being asked to pay the price, this time for inflation and the energy crisis. But I am not preaching about this.

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Image courtesy of "Metro"

Bank of England boss gives 'apocalyptic' warning over food costs (Metro)

The Governor of the Bank of England has warned there are 'major worries' food prices could be about to reach 'apocalyptic' levels.

He said the Bank’s view of Brexit, and that it will be bad for the UK trade, had not changed. ‘It is a major worry for this country and a major worry for the developing world. In March, UK food inflation increased by 5.9% and is expected to accelerate in the coming months. The governor said the war in Ukraine has resulted in an unpredictable jump in inflation, highlighting that there is still a ‘major worry’ over further rises in food prices due to the conflict. The Bank of England has said inflation is likely to peak at 10.25% during the final quarter of 2022. The Office for National statistics recorded inflation at 7% in March and later this week is expected to unveil over 8% inflation for April.

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Image courtesy of "Financial Times"

BoE governor says he is unable to stop inflation hitting 10% (Financial Times)

Andrew Bailey admits sounding 'apocalyptic' on food price increases and signals he will raise interest rates further.

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Image courtesy of "Evening Standard"

Bank of England governor sounds 'apocalyptic' warning on food ... (Evening Standard)

The Bank of England governor sounded an “apocalyptic” warning on Monday over looming food shortages caused by Vladimir Putin's invasion of Ukraine.

Sorry for being apocalyptic but that is a major concern.” But I am not preaching about this. “As you say, there have been a series of supply shocks and most recently with the impact of the war, Russia’s invasion of Ukraine,” he said. “It reflects a three per cent increase in the number of economically inactive people...somebody who does not have a job and who is not searching for one.” “Since the end of 2019, before Covid, we have seen a fall in the size of the labour market of around 450,000, about 1.3 per cent of the labour force. “At the margin in the labour force, it’s a big number, it’s a very big fall in the labour force by historical standards. He continued: “The persistence and scale of this drop has been a surprise to us.” “We have seen a fall in the size of the labour market force. “That will have a much bigger effect than the effect of the increases in the bank rate which we do, that is the big driver in terms of the downwards pressure.” “That is a major worry and it is not just a major worry for this country, it is a major worry for the developing world as well. “It’s a societal question. “Two, Ukraine is a major supplier of wheat, a major supplier of cooking oil, he was pretty optimistic about planting interestingly, but he said at the moment we have no way of shipping it out as things stand.

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Image courtesy of "Your Money"

Bank of England governor quizzed on soaring inflation - Your Money (Your Money)

The Bank of England governor, Andrew Bailey has been quizzed on its monetary policy response as inflation is expected to breach 10% later this year.

The financial crisis had a much smaller fall but recovered much more quickly.” There was uncertainty about the effect of it ending.” The governor of the Bank of England added that the remaining 20% inflation overshoot is due to the UK’s very tight labour market, the uncertainty around the end of the furlough scheme and “surprising” number of workers who had exited the labour market.

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Image courtesy of "The Independent"

Bank of England chief warns over 'apocalyptic' food price rises (The Independent)

Governor Andrew Bailey said he felt helpless as he defended the Bank's monetary policy despite soaring inflation.

Start your Independent Premium subscription today. “It is a major worry for this country and a major worry for the developing world. “I was asked if I have taken a pay rise myself this year and I said no, I had asked the Bank not to give me one, because I felt that was the right thing for me personally. “The Ukrainian finance minister said is that there is food in store but they can’t get it out,” he told MPs. The Governor stressed that the war in Ukraine has resulted in an unpredictable jump in inflation, highlighting that there is still a “major worry” over further rises in food prices due to the conflict. The Governor of the Bank of England has warned there is “very real income shock” coming from energy prices and “apocalyptic” food prices but stood by the Bank’s policy decisions.

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Image courtesy of "Telegraph.co.uk"

Bank of England warns of 'apocalyptic' global food shortage (Telegraph.co.uk)

Governor Andrew Bailey says he is 'helpless' in face of surging inflation.

“To forecast 10pc inflation and to say there is not a lot we can do about 80pc of it, I can tell you it is an extremely difficult place to be. Ukraine supplies large parts of the Middle East with grain, and there is a risk that families will be unable to afford to eat unless a solution is found. And that is clear.” But most price rises currently are coming from global markets, so this would have little effect in the short run. “That is a major worry. While [the finance minister] was optimistic about crop planting, he said at the moment we have no way of shipping it out as things stand, and it is getting worse.

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Image courtesy of "Sky News"

Cost of living: Bank of England governor warns of 'apocalyptic' food ... (Sky News)

Andrew Bailey hit back at criticism that the Bank acted too slowly to tackle inflation, blaming a "bad situation" on the impact of the war in Ukraine and ...

"And that is a major, major worry. Andrew Bailey hit back at criticism that the Bank acted too slowly to tackle inflation, blaming a "bad situation" on a series of external shocks including the war in Ukraine and the lockdown in China. Andrew Bailey hit back at criticism that the Bank acted too slowly to tackle inflation, blaming a "bad situation" on the impact of the war in Ukraine and COVID-19.

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Image courtesy of "Daily Mail"

Bank of England chief faces anger of MPs in hearing TODAY (Daily Mail)

Andrew Bailey lashed out at criticism in 'hindsight' as he gave evidence to the Treasury Committee on the slow response.

'Ukraine and Russia is the big risk in a way,' he said. More than in the good times, the easy times as it were.' Lord Forsyth, a former Cabinet minister and the chairman of the House of Lords' economic affairs committee, said: 'The first thing the Bank needs to do is acknowledge they made a mistake and say what they are going to do about it. 'It is a major worry for this country and a major worry for the developing world.' 'What I would say to these people is that this is when both the independence of the bank and the target framework and the nominal anchor matter more than ever, frankly. 'This is the biggest test of the monetary policy framework that we have had in 25 years, no question about that,' he said. At the hearing this afternoon, Mr Bailey said the potential for further food inflation is a 'major worry' for the central bank. There have been claims of Cabinet unrest about the performance of the Bank, which has now raised interest rates to 1 per cent and is predicting headline CPI inflation will top 10 per cent this year. The Bank has now raised interest rates to 1 per cent and is predicting headline CPI inflation will top 10 per cent this year Mr Bailey also painted a grim picture of the chances that the situation will improve soon, saying the prospect of more food inflation due to the Ukraine conflict is a 'major worry'. Andrew Bailey today denied the Bank of England has been 'asleep at the wheel' on inflation as he faced a roasting from MPs. The Governor lashed out at criticism in 'hindsight' but conceded the Bank is facing the biggest challenge to its structures for 25 years as he gave evidence to the Treasury Committee on the slow response.

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Image courtesy of "Evening Standard"

Bank of England chief warns over 'apocalyptic' food price rises (Evening Standard)

Governor Andrew Bailey said he felt helpless as he defended the Bank's monetary policy despite soaring inflation.

Sorry for being apocalyptic but that is a major concern.” But I am not preaching about this. “As you say, there have been a series of supply shocks and most recently with the impact of the war, Russia’s invasion of Ukraine,” he said. “It reflects a three per cent increase in the number of economically inactive people...somebody who does not have a job and who is not searching for one.” “Since the end of 2019, before Covid, we have seen a fall in the size of the labour market of around 450,000, about 1.3 per cent of the labour force. “At the margin in the labour force, it’s a big number, it’s a very big fall in the labour force by historical standards. He continued: “The persistence and scale of this drop has been a surprise to us.” “We have seen a fall in the size of the labour market force. “That will have a much bigger effect than the effect of the increases in the bank rate which we do, that is the big driver in terms of the downwards pressure.” “That is a major worry and it is not just a major worry for this country, it is a major worry for the developing world as well. “It’s a societal question. “Two, Ukraine is a major supplier of wheat, a major supplier of cooking oil, he was pretty optimistic about planting interestingly, but he said at the moment we have no way of shipping it out as things stand.

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Image courtesy of "iNews"

Food shortages: UK faces 'apocalyptic' blow to supply thanks to ... (iNews)

Andrew Bailey sounds alert over cooking oil and wheat - as he risks backlash by again suggesting workers should not ask for more pay because it will stoke ...

Do we have to completely throw it all in the air and think of different ways to do it?” It is a major worry for this country [the UK] and a major worry for the developing world.” While he was optimistic about crop planting, as a major supplier of wheat and cooking oil he said we have no way of shipping it out and that is getting worse.

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Image courtesy of "ITV News"

Bank of England chief warns over 'apocalyptic' food price rises (ITV News)

Governor Andrew Bailey said he felt helpless as he defended the Bank's monetary policy despite soaring inflation. | ITV National News.

Sorry for being apocalyptic but that is a major concern.” “It is a major worry for this country and a major worry for the developing world. There is “very real income shock” coming from energy prices and “apocalyptic” food prices, the Governor of the Bank of England has warned, but he stood by the Bank’s policy decisions.

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Image courtesy of "Business MattersBusiness Matters"

Don't ask for pay rise, Bank of England governor tells high earners (Business MattersBusiness Matters)

Workers should “think and reflect” on whether to ask for pay rises because they risk fuelling inflation, the governor of the Bank of England has said.

Why is it that every time there is a crisis, rich men ask ordinary people to pay for it? Sharon Graham, Unite’s general secretary, said: “Yet again workers are being asked to pay the price, this time for inflation and the energy crisis. David Ramsden, deputy governor for markets and banking at the Bank, warned that pay rises risked “embedding” inflation in the economy.

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Image courtesy of "The Independent"

Bank of England chief warns over 'apocalyptic' food price rises (The Independent)

Governor Andrew Bailey said he felt helpless as he defended the Bank's monetary policy despite soaring inflation.

Start your Independent Premium subscription today. “It is a major worry for this country and a major worry for the developing world. “I was asked if I have taken a pay rise myself this year and I said no, I had asked the Bank not to give me one, because I felt that was the right thing for me personally. “The Ukrainian finance minister said is that there is food in store but they can’t get it out,” he told MPs. The Governor stressed that the war in Ukraine has resulted in an unpredictable jump in inflation, highlighting that there is still a “major worry” over further rises in food prices due to the conflict. The Governor of the Bank of England has warned there is “very real income shock” coming from energy prices and “apocalyptic” food prices but stood by the Bank’s policy decisions.

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Image courtesy of "Sky News"

Cost of living: Minister 'somewhat surprised' at Bank of England's ... (Sky News)

Mr Bailey told MPs on the Treasury committee that rising food prices, at a time when supplies of goods such as wheat and cooking oil are being squeezed due to ...

Latest industry figures showed it hit 5.9% in April, the steepest rate since December 2011. are ordered and bought a long way in advance. Over the weekend it was reported in the Telegraph that Cabinet ministers have turned on the Bank of England - which is tasked with keeping inflation at around 2% - with one saying that the Bank had been "failing to get things right" and another that it had failed a "big test". "We do recognise there's a challenge. Mr Lewis said the comments from Mr Bailey were "a matter for the Bank of England - they are independent". A Cabinet minister has said he was "somewhat surprised" to hear the Bank of England warn of "apocalyptic" food price rises.

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Image courtesy of "Telegraph.co.uk"

Bank of England fights to save its reputation - and the economy (Telegraph.co.uk)

Tory assault on Threadneedle Street comes as inflation exposes chinks in its armour.

He would no doubt be happy to keep the spotlight on the Bank of England. “There was a very good reason why it was regarded as transitory at the time,” Bailey said. The MPC then pulled the reverse trick at its December meeting, bringing in an increase that many thought had been put on ice by omicron. Bailey had been keen to dismiss such comparisons as recently as November. “We’re a long, long way from the 1970s,” he told MPs then. Confidence in the Old Lady of Threadneedle Street may already be at risk, given the echoes of previous inflation shocks. Haldane, who served on the MPC until the middle of 2021, was a lone voice last summer when he called for quantitative easing to be brought to an end, fearing inflation would soon pick up.

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Image courtesy of "NationalWorld"

'Apocalyptic' food shortages: Bank of England governor Andrew ... (NationalWorld)

Get all of the latest Money news from NationalWorld. Providing fresh perspective online for news across the UK.

Sorry for being apocalyptic but that is a major concern.” “It’s a societal question, but I am not preaching about this. I was asked if I have taken a pay rise myself this year and I said no, I had asked the Bank not to give me one, because I felt that was the right thing for me personally. “It is a major worry for this country and a major worry for the developing world. “The Ukrainian finance minister said that there is food in store but they can’t get it out,” he told MPs. The governor said “we are walking a very narrow path” between surging inflation and risks to growth, and stressed that the war in Ukraine has led to an unpredictable jump in inflation, warning there is still a “major worry” over further rises in food costs due to the conflict.

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Image courtesy of "Telegraph.co.uk"

The Bank of England is running out of excuses for its failure (Telegraph.co.uk)

Andrew Bailey faces double digit inflation for the first time in 40 years Credit: Frank Augstein/ AP. So now we are not allowed to criticise the Bank of ...

Inflation is like the worst kind of unprogressive tax, in that it is the poorest in society - those spending disproportionate amounts of income on essentials such as energy and food - who are impacted most. "Monetary policy has to be exercised because in a small closing economy with an inflationary trend — similar to Britain in the 1970s — inflation does not self-correct with general movements in demand", he said in an article for the Financial Times. In evidence to the Commons Treasury Select Committee yesterday, Andrew Bailey and fellow members of the MPC admitted to two key misjudgments, both concerning the current tightness in the labour market. The other was failure to see the steep decline in labour market participation that has occurred as a result of the pandemic. Because of the way the energy price cap works, that's not yet the case in the UK, where the headline rate of inflation will continue rising for much of the remainder of this year. It's fair to say of course that the Bank of England could not have prevented much of the current surge in inflation even if it had raised interest rates at an earlier stage. It's all very well to argue, as Andrew Bailey did yesterday, that ignoring, or accommodating, the inflationary impact of external shocks is established practice for central banks. Yes, inflation will come down, but the chances of it remaining persistently above target are beginning to look quite high. Inflationary expectations fell a tad in April, but at 4.2 per cent in five to ten years time according to the latest Citi/YouGov poll, they are still uncomfortably high by past standards. That's been the approach to external shocks in the past, and generally speaking it has worked. Inflation is generally measured on an annual basis, so the headline rate is as much a reflection of where prices were a year ago as what they are now. Ministers and their allies risk making matters even worse by accusing the Bank of not being up to the job.

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Image courtesy of "NationalWorld"

Who is Bank of England governor? Andrew Bailey salary - and ... (NationalWorld)

Get all of the latest Money news from NationalWorld. Providing fresh perspective online for news across the UK.

As of March, the rate was at 7%, with the Bank of England expecting this to rise to 10% in the final quarter of 2022. Is this why the Bank of England is out of touch?” “He earns almost £300 an hour. Care workers earn £9 an hour. In response to the advice that workers in the UK should not receive pay increase, the Bank of England was labelled out of touch. Andrew Bailey was appointed to the role of Bank of England governor in 2019 by Sajid Javid, who is now the Health Secretary.

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Image courtesy of "New Statesman"

The Tories are trying to blame the Bank of England for our economic ... (New Statesman)

MPs and ministers are looking for a scapegoat for Britain's emerging economic crisis; that person may be Andrew Bailey.

The Bank was forced to keep debt as cheap as possible, interest rates remained historically low for a decade, and when the pandemic arrived, the Bank’s powers were limited by the fact that the basic rate was already 0.75 per cent. But do the Tories really want to take control of monetary policy from the Bank? Given that the Bank’s role is often to make things more expensive, it’s hard to think of a sane MP who would take the job. The politics are made harder still by the right wing of the Conservative Party, which defines itself by its war on institutions and doesn’t see why civil servants should get to decide anything so important as interest rates. These comments echoed those made last week by Liam Fox, who asked for “an investigation into why the Bank of England so comprehensively underestimated the inflationary threat”, and earlier today by the Tory peer Michael Forsyth, who accused the Bank of “unleashing inflation in our country through failing to meet its proper mandate”. The average annual inflation from 1997 to 2021 was 1.96 per cent. For example, if the UK had better energy infrastructure and better-insulated homes it would be less exposed to the price of imported gas.

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Image courtesy of "The Independent"

Bank of England's Bailey under pressure from Government over ... (The Independent)

The Bank's Governor Andrew Bailey said he is “sorry for being apocalyptic” but the impact of the war in Ukraine on food prices is a “major concern”.

Start your Independent Premium subscription today. “It is a major worry for this country and a major worry for the developing world,” Mr Bailey said. “But the Bank of England is independent, they will have their view of their assessment, their economic view of where things are and where things are going.” In his evidence to the Commons Treasury Committee on Monday, the Governor stressed that the war in Ukraine has resulted in an unpredictable jump in inflation, highlighting that there is still a “major worry” over further rises in food prices due to the conflict. The Bank’s Governor Andrew Bailey said he is “sorry for being apocalyptic” but the impact of the war in Ukraine on food prices is a “major concern”. In a sign of the tension between the Government and the Bank, Cabinet minister Brandon Lewis said he was “surprised” by the language Mr Bailey used to describe the rising cost of living.

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Image courtesy of "Evening Standard"

Chancellor Rishi Sunak backs continued Bank of England ... (Evening Standard)

Mel Stride called on Rishi Sunak to give a 'categoric assurance' that there are 'no plans' to 'restrain the independence' of the Bank of England.

Mr Sunak replied: “I agree with him wholeheartedly and whilst we do face challenges at the moment, the record of 25 years of central bank independence speaks for itself with an average inflation rate of exactly 2% and I know all colleagues will want to make sure that we return to that as swiftly as possible, and I can assure him that is both my and the governor’s ambition.” Chancellor whether he agrees with me that it is essential that our central bank is independent, in order to maintain the credibility and integrity of our monetary policy, and can he give a categoric assurance to the House that there are no plans of any kind to restrain the independence of our central bank?” His comments came as Conservative chair of the Treasury Committee Mel Stride called on Rishi Sunak to give a “categoric assurance to the House that there are no plans of any kind to restrain the independence” of the Bank of England.

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