Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the implications for his policies of the statement of the Governor of the Bank of England of 3 February 2022 on the need to see moderation of wage rises.

On 3 February, the Bank of England published their Monetary Policy Report, which updated their forecasts for a range of economic indicators. The government continually monitors such forecasts and economic developments, including changes to wages, to consider the impact on firms and households.

The government is taking action to support a high-productivity, growing economy. This includes through a £3.8bn investment in skills at the Budget and Spending Review last year.

As the global economy recovers from Covid, many economies are experiencing high inflation, in part due to pressures from rising energy prices and disruptions to global supply chains. However, the government understands people’s concerns around increasing prices.

We are taking targeted action worth around £12 billion this financial year and next to help families with the cost of living. We are cutting the Universal Credit taper to make sure work pays, freezing alcohol and fuel duties to keep costs down, and providing support to help households with the costs of essentials. Alongside this, the government has announced a package of support to help households with rising energy bills, worth £9.1 billion in 2022-23.

The separation of fiscal and monetary decisions is a key feature of the UK’s economic framework, and essential for the effective delivery of policy. The government therefore does not comment on the conduct or effectiveness of monetary policy.