The Governor of the Bank of England, Andrew Bailey, has defended not raising interest rates earlier.
His comments come after Attorney General Suella Braverman said interest rates “should have been raised a long time ago and the Bank of England has been too slow in this regard”.
Bailey told BBC Radio 4’s Today programme: “If you go back two years, which is, given the monetary transmission mechanisms, where we’d have to go back to, given the situation we were facing at that point in the context of Covid, in the context of the labour market, the idea that at that point we would have tightened monetary policy, you know I don’t remember there were many people saying that.”
The BBC said the full interview will be played at 8.10am.
Bailey also appeared to touch on the question of pay rises and their link to inflation, saying: “I put this in terms of high pay rises and high price increases, because in that world it’s the people who are least well off who are worst affected because they don’t have the bargaining power, and I think that is something that, you know, I would say broadly we all have to be very, very conscious of.”
In May, Mr Bailey said workers, particular high earners, should “think and reflect” before asking for high wage increases – a remark which drew criticism at the time.