The obscenely paid bosses of the Bank of England and Ofgem have let down Britain at a time we need them most
JUST suck it up, folks! Live off the cash you’ve stuffed under the mattress during lockdown. And don’t ask for a pay rise.
This seems to be bungling Bank of England boss Andrew Bailey’s message to 28million households facing the biggest cost-of-living crisis in most people’s lives.
Workers should “think and reflect” before asking for bigger wages to pay the soaring bills, suggested the £575,000-a-year governor.
Bailey, an unpopular choice for the top job, is blamed by MPs for being “asleep at the wheel” as inflation took off last year to among the highest in the industrialised world.
Alongside him in the dock is £330,000-a-year Ofgem chief Jonathan Brearley who failed to protect consumers from 31 high-risk pop-up “energy companies” which have crashed in the last year, adding £2.6BILLION to fuel bills.
Now he has imposed a controversial new energy cap denounced yesterday by money-saving expert Martin Lewis as a “f***ing disgrace”.
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Charities and consumer groups say the move will see prices rising further and faster.
Ofgem is also blamed for failing to crack down on deals which give more favourable treatment to consumers who can afford to pay by direct debit than poorer customers who pay by cheque or in advance.
The two regulators are in the dock over a cash crisis engulfing the poorest and oldest in society as fuel and food bills shoot through the roof.
Hovering behind them are Chancellor Rishi Sunak, who socked workers with an NIC hike, and PM Boris Johnson for refusing to ditch his precious green “stealth tax” on energy bills.
Ringing alarm bells
Inflation is rising across the world, but economists claim the UK rate is two per cent higher than it need be because of such blunders.
Consumer groups say every taxpayer in Britain is paying more for gas and electricity than they should.
They are also seeing food prices take off amid warnings of actual shortages to come.
Bailey’s key role as governor is to keep inflation no higher than two per cent, where it has ticked along for a decade.
If it rises above this level, he must write a letter to the Chancellor explaining why. He has been writing a lot of letters lately.
Today’s retail prices index figures for April are expected to show it has jumped from 7.5 per cent to around nine per cent in a month — well on track for a forecast ten per cent this summer and rising still higher before hitting its peak.
Bailey blames everyone else but the bank, especially the war in Ukraine.
But inflation was rising long before Mad Vlad Putin invaded. Bailey dismissed it back then as “transitory”, with a likely ceiling of five per cent.
His forecast was greeted with disbelief by City experts — including his own chief economist Andy Haldane, who was ringing alarm bells right up until he walked out the door last year.
So was Rishi Sunak, who was privately worrying about soaring costs as early as last summer.
The Bank has been accused on two fronts — failing to raise interest rates sooner, and refusing to rein in “quantitative easing”, a posh term for printing, or inventing, money.
Its former deputy governor, NatWest boss Howard Davies, blames Bailey’s team for letting prices rip before raising interest rates, which are now doomed to shoot higher.
“It is unfortunate that the Bank did not do some tightening earlier,” he said this week. “History shows that if you don’t get ahead of the game, then you have to do more later.”
The Commons Treasury committee is even more blunt.
Chairman Mel Stride says: “The Bank of England has undoubtedly failed.”
UK inflation is now tipped to rise higher and stick longer than in other comparable economies.
Meanwhile, Jonathan Brearley is on the rack over his plan to update the price cap on energy prices every three months instead of twice a year.
This, he claims, means prices will fall faster once fuel costs drop.
In a four-letter blast on Monday, Martin Lewis warned this would help energy companies — NOT their customers.
“I want to formally apologise for losing my rag,” he tweeted later.
“I lost it about today’s proposals, where it feels like at every turn, in these desperate times where lives are at risk, Ofgem has ignored all asks for consumers and instead kowtowed to the industry.”
More frequent price caps were a “disaster . . . killing hopes of firms launching cheaper deals”.
Of course, the war in Ukraine is a primary driver of rising inflation.
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But, just as public health authorities were caught flat-footed over Covid, the banking and energy regulators who are there to safeguard the national interest have been caught out.
They have complacently ignored the warning red lights flashing for all to see and they have failed dismally to do their job.