Bank of England economist says people need to accept they are poorer

The Bank of England’s chief economist, Huw Pill, has warned that people in the UK must accept that they are poorer, or else prices will continue to rise. Speaking on a podcast in the US, Pill stated that workers’ demand for higher wages and businesses’ decision to raise prices are adding to inflation, which is currently at 10.1%, far higher than the Bank of England’s 2% target rate. 

The Bank has raised interest rates in an attempt to reduce spending and slow price rises, but Pill argues that people must also take responsibility and stop trying to maintain their real spending power by bidding up prices. 

He stated that the pass-the-parcel game of shifting costs to others is generating inflation, which will persist unless people accept that they are worse off and make changes.