September 30, 2023

The Bank of England’s top economist has said he should have been more careful with his words after facing criticism for suggesting some British households or businesses “need to admit” they are poor.

Hu Pil, the central bank’s chief economist, said the country’s economy was facing “very difficult and challenging” times, but he should use language that was “less inflammatory”.

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It came after he said in a podcast last month: “You don’t need to be much of an economist to realize that if what you’re buying has gone up relative to what you’re selling , then you’re going to be worse.

“So, somehow in the UK, one needs to accept that they are worse off and stop trying to maintain their real spending power, whether through higher wages or passing on energy costs to customers etc. Through.

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“What we are facing now is an unwillingness to admit that, yes, we are all worse off and we all have to do our part.”

Bank governor Andrew Bailey told reporters last week that there had been a reduction in national income, but that the term “wasn’t quite right”.

On Monday, in a public Q&A session, Mr Pill said: “If I had the chance to use different words again I would use a few different words to describe the challenges we are all facing Are.

“I think the viral response to my words probably hasn’t been very helpful to our communication or our understanding of the situation.

“I think more importantly, it is important to recognize from the outset that from an institutional perspective, from the Bank of England’s position, and also from an individual perspective, that we recognize that we are in a very difficult and challenging situation. The times and those challenges are particularly acute for some parts of society.

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This comes at a time when the bank is attempting to tackle inflation driven by a rise in energy and food prices.

Last week, the central bank raised interest rates for the 12th consecutive time to 4.5% – the highest level since 2008 – in an attempt to bring down inflation.

The most recent March inflation rate was recorded at 10.1% by the Office for National Statistics.

The bank said it is expected to fall to 5.2% by the end of the year.

However, Mr Pill insisted that inflation remained “unacceptably and undesirably high” and said it was “critical” it does not stabilize at around 5% for the long term.