BOE Policy Makers Awarded 1% Pay Increase, Court Minutes Show

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(Bloomberg) -- Bank of England policy makers grappling with the U.K.’s stubbornly low wage growth are seeing their own pay rise at well below the average rate.

Minutes of the February meeting of the BOE’s Court of Directors, its governing body, published on Wednesday, showed the remuneration committee had agreed to a pay increase of 1 percent for the BOE’s governors and deputies, and was proposing the same increase for external members of the three policy committees.

Mark Carney “had again declined the proposed pay increase,” the minutes said. The governor hasn’t taken a pay rise since he joined the bank in 2013, when he was given a 480,000-pound ($670,000) base salary, as well as a 250,000-pound housing allowance.

Pay pressures, or a lack thereof, have been troubling U.K. policy makers as they move toward tighter policy. Faster inflation since the Brexit vote has led to a yearlong squeeze on consumers’ income, which is only just showing signs of abating, while Carney said this month workers have seen a decade of lost wage growth.

A report last week showed annual pay growth excluding bonuses accelerated to 2.8 percent in the three months through February. While that’s the fastest pace in almost three years, it remains well below the pre-crisis rate of about 4 percent a year.

The BOE has also experienced the dissatisfaction over pay firsthand. In 2017, workers in maintenance, security and the governors’ private offices staged a strike over “fair pay” and the bank’s “unwillingness” to discuss more compensation for members. The BOE had issued a 1 percent pay raise to workers, in line with the government’s ceiling on public-sector pay increases.

Eventually, they accepted a deal from the BOE that included a payment to lower-paid staff in their next wage review and additional leave.

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