British families must accept that they're worse off after a surge in inflation and stop pushing for a pay rise, says a senior Bank of England official.
Huw Pill, the Bank's chief economist, warned that rising prices have made the whole country poorer and said that attempts to bid up wages were merely prolonging the agony.
His comments immediately came under attack from both unions and the business community.
Inflation was five times higher than the Bank of England's 2% target in March at 10.1%.
Wages were rising at one of the fastest paces seen outside the pandemic in the three months to February at 6.6%, stoking fears that price rises would prove persistent. However, in real terms, pay was still falling rapidly.
Earlier on Tuesday, the Bank's deputy governor Ben Broadbent defended its record and denied that raising interest rates earlier could have made a meaningful difference.
Less inflation
Mr Broadbent said: "If we had started three, four, five, six months earlier (there would have been), I don't know, maybe a maximum of half a point less inflation."
Interest rates would have had to rise to nearly 20% to completely stem the current bout of high inflation, he said.
Unions were quick to seize upon Mr Pill's comments.
Laurence Turner, head of research and policy at the GMB, told the Telegraph: "It's staggeringly crass for one of the best-paid public officials to tell working people they should accept poverty wages during the worst cost-of-living crisis in living memory."
This was echoed by Paul Nowak, general secretary of the Trades Union Congress, who said working people "don't need lectures" - but rather a pay rise.
Mr Pill's remarks also angered trade bodies, with the Federation for Small Businesses hitting out.
Angered
Tina McKenzie, its policy chairman, said: "Small businesses will be rightly angered by these tone-deaf comments from Mr Pill as they struggle with inflation that is still sky-high."
Mr Pill compared raising wages and prices in response to high inflation to a game of pass the parcel, where each player was unwilling to accept the burden of higher prices that made them poorer.
He said: "That pass-the-parcel game that is going on here, that game is the one that's generating inflation and that part of inflation can persist."
Mr Pill added that there was a "reluctance to accept" that Britain had become collectively poorer, but claimed it was an inevitable consequence of the surge in energy prices since the invasion of Ukraine.
He said people would have to eventually accept "that yes, we're all worse off and we all have to take our share."
The comments risk reigniting criticism of the Bank of England for its handling of the worst inflation crisis in almost half a century.
Raising prices
The Bank's Governor Andrew Bailey triggered anger last year when he urged workers not to ask for large pay rises and told businesses to stop trying to raise prices to beat inflation.
Critics argued Mr Bailey was trying to shift the blame for soaring prices onto workers and companies, rather than accepting the Bank's own failings.