Why BoE Economist Says Britons Need To Accept 'They Are Poorer,' Stop Asking For Pay Hikes

The Bank of England’s chief economist Huw Pill reportedly said people in the U.K. need to accept they are poorer and asked them to stop asking for pay rises that would push prices higher.

Pill said a game of "pass the parcel" is taking place in the economy, according to a report by The Guardian.

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"If the cost of what you're buying has gone up compared to what you're selling, you're going to be worse off," he said. "So somehow in the U.K., 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," Pill said, according to the report.

The economist explained that there is a reluctance to accept that "we're all worse off, and we all have to take our share."

"Instead, [people] try and pass that cost on to one of our compatriots, saying ‘we'll be all right, but they will have to take our share too,' he said adding, "That pass the parcel game that's going on here … that game is generating inflation, and that part of inflation can persist."

Inflation: The headline rate of inflation in the U.K. declined less than expected in March to 10.1% from 10.4% in February.

Pill also noted that inflation has been higher than expected for an undesirably long time. The Bank of England is widely expected to hike interest rates for the 12th time in a row next month by 25 basis points to 4.5%.

Pill is not the only expert to have recommended people not ask for wage increases. BoE governor Andrew Bailey was widely criticized last year after saying workers should not ask for big pay hikes to try to prevent price rises from going out of control, the report said.

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