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 comments by the Governor of the Bank of England on pay restraint made in February 2023.

The Government is committed to the Prime Minister’s pledge to grow the economy and halve inflation. We remain steadfast in our support for the Bank of England’s independent Monetary Policy Committee.

Pay for most frontline workforces is set by the independent Pay Review Body (PRB) process. On 13 July, the Government confirmed that it would be accepting the headline pay recommendations of the PRBs in full.

Government borrowing to pay for things, such as public sector pay, boosts demand and in turn can increase inflationary pressure. That is why these pay uplifts will not be funded through any new borrowing.