The Bank of England, which has been criticized for underestimating the threat of rising inflation, last year paid out bonuses to its staff amounting to more than £23m, the Observer can reveal.
This bonus pot was at its highest level for at least two years, with more than 4,260 employees receiving performance awards. Andrew Bailey, the bank’s governor, was widely criticized earlier this year after telling Britain’s workers that they should not be asking for big pay rises because inflation had to be kept under control.
The bank is tasked by the government with hitting an inflation target of 2%, but the current rate stands at 9.4%. Lord Sikka, emeritus professor of accounting at Sheffield University, said: “Bonuses should only be paid for extraordinary performance, but there is no evidence the bank has delivered even an ordinary performance. They are unjustified.
All employees at the bank, with the exception of Bailey, who was appointed in March 2020, are eligible for a discretionary annual performance award. Bank officials say the vast majority of its employees do not work on monetary policy.
Bailey earned a package totaling £597,592 in the year to the end of February: this included his base salary of £495,000 and a payment in lieu of pension of £99,000. It was reported earlier this year that he had turned down a 1.5% pay rise.
Liz Truss, foreign secretary and frontrunner in the race to become the next prime minister, has said she wants to review the mandate of the Bank of England. Bailey has said it is critically important that central banks maintain their independence.
