World Business

King refuses raise as specter of pay restraint looms over UK

By Svenja O'Donnell (China Daily)
Updated: 2010-06-04 10:13

LONDON - Bank of England Governor Mervyn King, the highest-paid among the world's top central bankers last year, refused a raise for this year and 2011 as an era of wage restraint looms to curb Britain's record budget deficit.

"In relation to 2010 and 2011 the governor has advised the remuneration committee that he does not wish to receive any increase in his salary," the central bank's annual report said. King took a 2.5 percent raise to 305,368 pounds ($445,318) including benefits on July 1 2009, according to the document published on the bank's website.

King already refused a revamped salary package when he was reappointed in 2008 which would have increased his basic pay to at least 375,000 pounds. His compensation currently exceeds that of the highest-earning UK government officials and is more than double the 142,500 pounds Prime Minister David Cameron receives, according to a list of salaries released on June 1.

King's pay now exceeds the 360,612 euros ($440,055) earned in 2009 by European Central Bank President Jean-Claude Trichet, whose salary was previously higher in dollar terms before the European sovereign-debt crisis prompted a drop in the euro.

Federal Reserve Chairman Ben Bernanke's salary this year is $199,700, while Bank of Japan Governor Masaaki Shirakawa's pay in the fiscal year through March 31 was 34.9 million yen ($378,607) after he and his policy board took a 2.4 percent salary reduction.

Budget deficit

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Britain posted its largest April budget deficit since monthly records began in 1993 after the shortfall reached a postwar high of 11.1 percent of gross domestic product in the fiscal year through March. King last month endorsed the government's plans to curb the deficit after a year of urging politicians to take faster action on the budget.

The Bank of England employed about 3 percent more staff last year "due to the extra workload brought on by the bank's new responsibilities", the report said. Its workforce totaled 1,685 full-time and 219 part-time employees.

King, writing in the foreword to the annual report, reiterated the bank's commitment to its 2 percent inflation target after consumer prices rose in April at the fastest annual pace since 2008.

Bloomberg News