When a clerk's pay matched chief cashier's: Peter Torday finds some surprising facts as the Bank of England looks back on its 300-year tenure

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THE BANK of England has confessed to paying its clerks less than it did when it was founded 300 years ago.

In a lengthy article in this week's Bulletin detailing the sporadic progress of inflation during its 300- year tenure as a central bank, the Bank admits that the pounds 50 a year it gave its clerks in 1694 is equivalent to an annual salary of pounds 20,000 today. Clerks currently start at the Bank on salaries of around pounds 15,000.

In those days, though, the Bank was a more egalitarian place where clerks and the chief cashier, whose signature appears on all banknotes, earned the same amount. Today, while recognising the relatively poor pay of its minions, the Bank acknowledges: 'The chief cashier has done rather better.'

Cost control at the Bank has clearly slipped in other directions, however. In 1694 the Bank was cleaned by just one person, Susan Bennett, who was paid pounds 10 a year. Today, there is a staff of 59 housekeepers whose annual salary is around 500 times greater.

Its own salaries aside, the Bank's recent record on controlling inflation in the wider economy is less than perfect. Prices, which have increased by a factor of 67 since it was founded in 1694, have risen more rapidly in the past 50 years than in any similar period during the past three centuries.

The price index tripled between 1694 and 1948 but has risen almost 20-fold since. Until the 20th century, however, prices often either fell or showed little tendency to move one way or the other.

One period when they did rise sharply was during the Napoleonic wars. Bank staff complained at the time that salary increases failed to match the climbing cost of living.

Perhaps that explains the anonymous adage quoted by the Bank: 'When I first started working I used to dream of the day when I might be earning the salary I'm starving on today.'

Since the Bank was founded the basket of goods and services which serves as the basis for the retail price index has changed out of all recognition.

But a few elements endure. Some 4lbs of bread, which cost 5.6d (2.3p) in 1694, cost only 5.5d in 1894. The decade from 1974 to 1984 saw the price of bread triple and then jump a further 60 per cent in the following 10 years.