12 September 2014
The bank of England’s governor told TUC Congress that interests rates were likely to rise before wages do, in his address on Tuesday (9/9).
He told Congress that wages would not rise before summer 2015 at the earliest, whereas interest rates would start growing in spring 2015.
After five years of falling pay, Carney responded to the TUC’s demand for a pay rise by telling delegates that it was up to workers to improve productivity if they wanted to see wages rise.
Carney acknowledged the devastating effect the financial crash has had on workers wages. He said that the UK’s ‘rapid’ fall in unemployment had come at the cost of wage growth.
“Wage growth has been very weak; in fact adjusted for inflation wages have fallen by a tenth since the onset of the crisis. And in order to find such a fall in the past, you would have to go back to the early 1920s”
. He claimed that through accepting pay cuts, Britain’s trade unions had averted unemployment crises such as those seen in the US and the Eurozone.
Len McCluskey said of the speech, “In the past, Mark Carney has called for ‘inclusive capitalism’, but the tone of today’s speech was that working people will have to work longer, and, in many cases, for lower rates of pay”.
“But without plentiful, well-paid jobs, the UK economy will never fully recover and reach its true potential for the benefit of all, and not just a wealthy elite.
“Mark Carney should have made a strong call to business and the corporate sector to take more responsibility for providing greater employment opportunities, boosting pay levels and taking more a pro-active role in the communities in which they operate”.