Bank of England embarks on ‘Kardashian-style spending spree’ as IT budget hits almost £100m
The Bank of England has increased its IT budget to nearly £100m, while its staff are sharing an almost-£50m pot, City PM can reveal.
The data, obtained by the think tank Parliament Street under a Freedom of Information (FOI) request, and shared exclusively with this paper, revealed the Bank of England splashed £98.8m on tech last year, up from £87.7m the previous year – an increase of 12.6 per cent.
In total, 704 IT staff shared a salary pot of £48.9m, making the average salary in the tech team a whopping £69,000-a-year.
However, this has stayed static for the last five years, despite inflation – the average salary in 2019 was also around £69,000.
The Bank, which is headed by Andrew Bailey as governor, was praised for the investment by entrepreneurs and tech experts, but also came in for sharp criticism, for a “Kardashian style spending spree” during tough economic times.
Khalid Talukder, co-founder of DKK Partners said: “The BoE sits at the very heart of the UK’s financial system, so this kind of heavy tech investment is critical for ensuring long term monetary stability.
Cranking up IT budgets is sign that our aged central bank is finally catching up with the rest of the world.
Khalid Talukder
Simon Ward, chief executive of Inspired Thinking Group, also heaped praise on the historic institution, which will come under the spotlight on Thursday when it makes its latest judgment on interest rates.
“Extra investment in core IT will enable the BoE to make the most of AI and digital transformation, allowing it to become a more effective organisation. If we want to build a truly dynamic digital economy, these kinds of commitments are key to driving growth for the long term.”
Tech entrepreneur Lior Sion added that: “ramping up IT spending is a sign of an organisation looking to the future and these commitments will actually help lower costs over time.”
However, some were more pessimistic about the rise in spending.
Patrick Sullivan, chairman of the Parliament Street think tank which obtained the data, delivered some sharp criticism.
“With sky high interest rates and the cost-of-living crisis hitting families hard, Governor Bailey should be showing restraint instead of embarking on a Kardashian style spending spree. Once upon a time Threadneedle Street was a shining example of prudence, these days it’s more like an LA reality TV show.”
Separate research from last week revealed that Threadneedle Street gave 4,460 staff “performance awards” in the financial year ending in 2023.
The highest single bonus paid was worth £22,590 and more than 400 staff were given awards of more than £10,000. Earlier in March, the Telegraph reported that more than 500 people at the Bank earned more than £100,000 in the financial year 2022-2023.