The Bank of England’s failure to keep a lid on inflation may end up leaving it not just red-faced but with an administrative headache as staff stage their first strike on record at the Threadneedle Street headquarters.
Members of the Unite union working in the Bank’s reception, maintenance and facilities operations are being balloted on whether to walk out over their sub-inflation pay awards.
Unite has accused the Bank of “treating its workers with contempt” and being “arrogant and out of touch” by offering a pay rise of 1 per cent with inflation at 2.7 per cent. In February members voted by more than 70 per cent for a formal industrial action ballot.
A decision to strike would affect only about 100 of the Bank’s 4,000 staff but would threaten to disrupt normal operations and would serve as an embarrassing illustration of its failure to cap inflation at the 2 per cent target.
Mark Carney, the governor who takes home £880,000 a year, has warned that life is about to get “challenging” for households as wages are outpaced by rising prices. He has not taken a pay rise since joining in 2013.
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“The Bank’s disgraceful snub of low-paid staff stinks of arrogance and represents an organisation thoroughly out of touch with the reality of the pressure staff face meeting their costs of living,” Mercedes Sanchez, Unite’s regional officer, said.
The Bank has decided to increase the total pay pot by 1 per cent this year, with staff measured on performance. Some will receive more than 1 per cent and some no increase at all. There is a separate bonus pool of up to 10 per cent of an individual’s salary, a Bank source said.
The decision to increase the pot by just 1 per cent was a reflection of the government’s public sector pay cap. As chancellor in 2015, George Osborne extended the 1 per cent cap to 2020. Although the Bank is excluded, it is a public sector body and is understood to take broader public sector pay into consideration in its awards decision. Last year the salary pool was similarly limited to 1 per cent.
The last time the Bank faced strike action was in the 1960s when staff in the off-site banknote print works downed tools. It has never suffered a strike at its headquarters in the City.
Neither the Bank nor Unite could say whether the Bank’s pink-coated doormen might strike. The ballot will close on June 21.