Companies and workers in the UK are trying to shift the impact of inflation from one to another, and this risks leading to persistent inflation, according to the chief economist of the Bank of England, Hugh Pill, reports CNBC.

“Now we’re dealing with this reluctance to admit that yes, we’re all worse off, that we all have to bear the brunt,” Pill said in an episode of Columbia Law School and the Millstein Center’s “Beyond Unprecedented” podcast released Tuesday.

“Let’s try to pass that cost on to one of our countrymen and say, we’ll be fine, but they’ll have to carry our part, like in a game when they hand over the package… that’s what creates inflation,” he said. is highlighted.

Pill discussed the “series of inflationary shocks” that have contributed to inflation over the past 18 months, from supply disruptions due to the pandemic and government demand-stimulating household support programs to the Russian invasion of Ukraine and the resulting rise in energy prices in Europe.

This was followed by bad weather and an outbreak of bird flu, which caused food prices to rise.

But Pill said that was not the whole story and that it was “normal” for those who set prices and wages in economies including the UK and the US to change their behavior when living costs such as electricity bills rise, workers demand higher wages and businesses raise prices.

“Of course, this process eventually leads to failure,” Pill said.

He added that the UK, which is a net importer of natural gas, has faced a situation where the goods it buys from the rest of the world have become much more expensive compared to what it sells to the rest of the world, primarily services. .

Great Britain imports almost half of its food.

“If what you’re buying has gone up significantly compared to what you’re selling, you’re worse off,” Pill said.