Carney: British Workers 'Deserve' Pay Rise

The Governor of the Bank of England has told the TUC conference that British workers are on track to receive the higher pay rewards they "deserve".

Mark Carney made the comments when he became the third leader of the country's central bank to address delegates at the union organisation's annual gathering, which this year has the slogan: "Britain needs a pay rise".

He said Britain's workforce and trade unions deserved "great credit" for ensuring that the UK is not expected to suffer a "lost generation" of workers as a result of the financial crisis.

He pointed to greater national employment levels at the expense of wage rises to support his argument.

Adjusted for inflation, Mr Carney said pay had fallen by around a tenth since the onset of the crisis but this had ensured that one million more people were in work.

He said: "The burden of the Great Recession has been shared across the UK.

"Profits have been squeezed almost as much as labour costs. Employees have seen their real incomes reduced, but more people are in work as a result."

On the prospect of improved wage growth, he said it would be pegged to productivity growth.

The Bank's latest forecast expects real wage growth to resume around the middle of next year and then to accelerate as the unemployment rate continues to fall to around 5.5% over the next three years.

Mr Carney added: "By the end of our forecast, we see 4% nominal pay growth on average across the economy.

"This is consistent with our inflation target and the economy's potential."

He painted a contrasting picture with the United States and the eurozone, where the unemployment rate is 11%, and again hinted that interest rates would only rise when conditions in the labour market allowed.

Commenting on the speech, TUC general secretary Frances O'Grady said: "Mark Carney recognised the pain felt by British workers from pay cuts deeper than any since the 1920s, and he was clear that Britain deserves a pay rise.

"His strong support for the living wage, not least by making the Bank of England an accredited living wage employer, should be heard across government and the public sector.

"And his caution on interest rates may have been carefully phrased, but showed he understood the worries of households hit by the living standards squeeze."

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