The Bank of England (BOE) has agreed a 3.5% pay rise for its 4,200 staff and a one-off 1% salary top-up this year under a sub-inflation deal that has been accepted by the union.
The increase in the overall pay pot will be targeted at lower paid staff to protect them against the worst of the living standards squeeze, with the better-off receiving smaller rises of as little as 1%.
BOE staff will also see the value of their benefits increase by 1% of salary for this year only and given the option of taking the uplift in cash. Governor Andrew Bailey, whose total compensation was roughly £598,000 ($737,510) last year, declined a raise for a second year running.
Unite, which has more than 600 members at the BOE, has accepted the deal, which heads off the risk of a strike. Workers across the public sector, including nurses, teachers and on the railways, are staging walk-outs in protest at below inflation pay offers that have brought much off the country to its knees.
The union stressed that, for lower-paid staff, the package was considerably more generous than the headline 3.5% settlement — and close to matching the current inflation rate of 10.5%. Not only will they get larger pay rises and the 1% top-up, but there will be an extra £1,000 one-off payment for those earning less than £40,000 this year and an extra £500 for those on £40,000 to £45,000.
Staff whose job requires them to be in the office, such as security guards and maintenance, will receive a further £750 payment both this month and next January to cover travel. The BOE also agreed an extra day’s leave, increasing the entitlement to 26 days plus bank holidays, and to extend the company-wide benefits package to include dental insurance.
Like other central bankers, Bailey has called for pay restraint to head off a wage-price spiral. He fears that large pay settlements will only feed into higher inflation as companies try to recover wage costs by raising prices, setting off a damaging feedback loop.
For the average BOE worker, the package will be worth 4.5% this year including the benefit uplift — half the rate of inflation and less than the 5% the government agreed for 5.5 million public sector workers in 2022.
A BOE spokesperson said: “We need to strike a balance between maintaining budgetary discipline with public funds, retaining critical skills, and addressing the cost of living pressures facing our staff” For next year, we have agreed a 3.5% pay award budget targeted towards staff lower in their pay scales, and a one-year only non-pensionable benefits uplift worth 1%.”
Last year, BOE staff received a 1.5% pay rise, which followed at 1.25% rise in 2021. The ECB agreed a 4.07% deal for 2023 in December.