That 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 he told British workers they should not ask for big pay rises because inflation needed to be kept under control. The bank has been tasked by the government with achieving an inflation target of 2%, but the current rate stands at 9.4%. Lord Sikka, emeritus professor of accountancy at the University of Sheffield, said: “Bonus should only be paid for exceptional performance, but there is no evidence that the bank has delivered even an ordinary performance. They are unjustified.” All bank employees, 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 are not involved in monetary policy. Bailey earned a package totaling £597,592 in the year to the end of February: this included his £495,000 basic salary and a £99,000 pension payment. It was reported earlier this year that he had turned down a 1.5% pay rise. Bonuses should be for exceptional performance but there is no evidence that the bank has delivered even an ordinary performance Lord Sikka The total bonus pot paid to Bank of England staff in 2021/22 was £23,325,265, up from £22,080,732 the previous year. Figures revealed to the Observer under freedom of information laws show 34 staff were awarded awards of between £15,000 and £20,000. Bank officials say the discretionary award budget was 10% of the total wage bill in the last two financial years, but the number of its employees has increased. Average payments per person fell from £5,560 in 2020/21 to £5,471 in 2021/22. The bank has been criticized by MPs for its handling of inflation. Former Tory Chancellor of the Exchequer Robert Jenrick told the Financial Times in May: “The BoE missed an opportunity to get a handle on inflation last year by arguing that it would be moderate and transitory when it was clear to many of us that it would be high and long-lasting. . “Now we risk entering a new inflationary era. Having acted too little, too late, there is a risk of overcompensation if it pursues significant further rate hikes.” Liz Truss, the foreign secretary and a front-runner in the race to become the next prime minister, has said she wants to review the Bank of England’s mandate. Bailey said it is extremely important that central banks maintain their independence. The Bank of England declined to comment.
