The Governor of the Bank of England urged financial giants to show pay “restraint” - on the same day Barclays announced a more than £1.9billion bonus bonanza.
Andrew Bailey, who is on more than £575,000 a year, came under fire recently for suggesting workers should not ask for big pay rises to help control soaring inflation.
Quizzed by MPs today, he warned chunky wages rises would lead to a “second round affect” on inflation.
Labour MP Angela Eagle, who contrasted Mr Bailey’s pay with that of a care worker, asked him whether that applied to banks which are in the middle of announcing a bonus bonanza for top staff.
Pressed on the matter, Mr Bailey said: “We don’t set pay levels for banks.”
He then added: “The same restraint holds for everybody.
“All I would say is please reflect on the situation we are in.”
Yet it came as Barclays hiked its bonus pot by 23% to more than £1.9billion for 2021.
Barclays said: “This represents an increase that recognises the strong performance across all businesses, following reductions in the incentive pool across many areas of the group last year.”
Rival HSBC revealed on Tuesday that it had ramped-up bonuses for staff to £2.6billion.
Labour MP Siobhain McDonagh told a hearing of the Treasury Select Committee: “We have heard that banker bonuses are back with a bang.”
She said that while Barclays was announcing bumper rewards for top staff, it was busy closing branches.
Barclays’ annual report revealed nearly 300 branches has closed in the past two years, including 104 - two every week - in 2021.
Ms McDonagh also pointed out that as HSBC was dishing out big bonuses, the bank had axed free accounts for charities and community groups.
Mr Bailey had earlier hinted that companies should think carefully when considering price rises because of the impact on inflation.
The Governor also told the hearing that he would visit a care home.
It came as the GMB union invited him to work as a carer for the day.
Gary Smith, GMB General Secretary, said:
“Mr Bailey made it quite clear he still thinks the answer to the cost of living crisis is to hold down wages.
“Let’s hope he follows through on his commitment to meet the low-paid workers in the care sector who he thinks should show pay ‘restraint’.
It came as Mr Bailey warned the cost of living crisis could drag on longer than feared.
He told MPs: “There is a risk that there will be higher inflation for longer.
“The other side of the risk is that it will come down faster.”
