- "In 2011, real wages are likely to be no higher than they were in 2005... One has to go back to the 1920s to find a time when real wages fell over a period of six years."
- "The Bank of England cannot prevent the squeeze on real take-home pay that so many families are now beginning to realise is the legacy of the banking crisis and the need to rebalance our economy."
- "The squeeze on living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK economies."
- Furthermore, inflation may rise "to somewhere between four per cent and five per cent over the next few months."
- "The idea that the MPC could have preserved living standards, by preventing the rise in inflation without also pushing down earnings growth further, is wishful thinking."
- "[U]npleasant though it is, the Monetary Policy Committee neither can, nor should try to, prevent the squeeze in living standards, half of which is coming in the form of higher prices and half in earnings rising at a rate lower than normal."
- "I sympathise completely with savers and those who behaved prudently now find themselves among the biggest losers from this crisis."
Back to Clay: Whoa! To summarize, one of the world's leading central bankers admitted that he is completely powerless to prevent the inevitable decline in living standards that will result from years of reckless behavior. And here's the punchline...
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