People in the UK should accept being poorer

The Bank of England’s chief economist has said that we must accept being poor in the UK.

Huw Pill who was talking in the Columbia Law School’s Beyond Unprecedented podcast said that it would be better if people accepted, they are poorer and warned that inflation could remain high.

This comes as Bank governor Andrew Bailey said that large wages and further cost increases damage the Bank’s efforts to cool inflation. And, in the Podcast Huw Pill mentions that people have responded to the cost-of-living crisis by asking for higher wages and charging their customers more.

The Bank of England is worried that although much of inflation is due to energy and food costs wage increases will make getting inflation down harder.

Unions, however, dismiss this argument and many are seeking pay deals to help their members with the cost-of-living crisis.

Over the coming months, inflation is due to ease when the effects of the first big energy bill hikes are taken out of the inflation data.

If there are higher increases in wager than that are expected, then the Bank of England would raise interest rates next month.

Huw Pill went on to say that “The UK, which is a big net importer of natural gas, is facing a situation where the price of what you’re buying from the rest of the world has gone up a lot, relative to the price of what you’re selling to the rest of the world, which is mainly services in the case of the UK.”

“You don’t need to be much of an economist to realise that if what you’re buying has gone up a lot relative to what you’re selling, you’re going to be worse off.”