Andrew Bailey - Governor of the Bank of England - has suggested that employees should not ask for large pay increases, even as inflation rises.

Inflation - as measured by the consumer prices index (CPI) - is expected to rise above 7% this year, peaking at around 7.25% in April and averaging close to 6% in 2022. However, according to a survey, workers are receiving pay rises of below 5%, which means a fall of 2% in post-tax incomes. This would be the biggest fall in living standards since 1990 when records began.

In an interview, Andrew Bailey said that while acceptance of inflation rising faster than wages would be "painful", it was necessary as inflation could spiral if employers then passed on any higher wage costs to consumers.

In an interview with The BBC’s Today programme last week Mr Bailey said:

"I'm not saying 'don't give your staff a pay rise' - this is about the size of it."

In response, General Secretary of Unite, Sharon Graham said:

"Workers don't need lectures from the governor of the Bank of England on exercising pay restraint.”

And Gary Smith, General Secretary of GMB Trade Union stated:

“Telling the hard-working people who carried this country through the pandemic they don’t deserve a pay rise is outrageous. According to Mr Bailey, carers, NHS workers, refuse collectors, shop workers and more should just swallow a massive real-terms pay cut at the same time as many are having to choose between heating and eating.”