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July 1, 2022

Barclays announces pay raise for UK staff despite BoE’s wage restraint pleas

British banking major Barclays has announced a pay raise for its UK staff working in branches, consumer-facing and junior support roles.

From 1 August 2022, the lender’s 35,000 employees will receive a £1,200 hike in their annual pensionable salary.

The move brings forward part of the annual pay review, which is normally due to come into force in March.

“Barclays will continue to monitor the economic situation globally and consider our approach to pay in each country in the local context. Barclays’ annual pay review for all staff will take place in the near future, effective from March 2023,” the bank’s statement read.

Barclays’ decision comes in response to rising inflationary pressure on people who are struggling to pay their bills and demanding a pay raise.

The hike comes despite Bank of England (BoE) Governor Andrew Bailey’s pleas for restraint on wages.

The BoE is concerned that pay hikes will result in an earnings-price spiral that will prolong already high inflation even after the impact of the Russia-Ukraine war and the pandemic has faded.

Industry experts fear that the UK is in the early stages of an earnings-price spiral, a report from the Telegraph said.

In such a scenario, rising inflationary pressure will fuel demand for pay hikes and the businesses will then pass on the cost of wage raise to consumers.

In May, inflation in the UK stood at 9.1% and the BoE’s estimates suggest that it will rise to 11% by October.

Last week, Lloyds Banking Group announced a similar measure for its 64,000 employees.

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