From Mr John Davies.

Sir, A significant proportion of the workers of this country are seeing their wages rise (if at all) by less than the rate of inflation.

Much of the new job creation, which is highlighted as a positive sign, is the result of those formerly in full-time employment being laid off, and starting consultancies or similar businesses where their earnings are for the most part much less than they were before (one reason for the fall in productivity).

In these circumstances of static or falling private-sector wages, it is remarkable that the governor of the Bank of England and his colleagues accept an inflation rate in this country that far outstrips that in other supposedly comparable jurisdictions. They propose to do nothing about the situation and say that the position will continue for at least the next three years. Through their inaction they are impoverishing a significant proportion of the population.

No doubt they know better than mere mortals, the situation is necessary and any alternative would be far worse. However, perhaps it would be appropriate for the governor and his colleagues, given their leadership positions, to renounce the index-linked element of their pensions payable under the Bank of England pension scheme.

Others in the financial services arena have been lent on to give up bonuses and so on. In the absence of such a gesture from the governor and his colleagues, a cynic might conclude that the reason they don’t care to do anything about inflation is that they have a copper-bottomed protection from it.

John Davies, London SW1, UK

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