Trade union Unite, which represents almost 600 of the Bank’s staff, recently accepted a 1.5pc pay increase this year that is due to take effect from April.

But Mr Bailey now faces a pay revolt on his own doorstep after the union’s regional officer, Steve O’Donnell, said: “Unite will be seeking a very substantial increase for workers at the Bank of England when pay talks resume later this year. [They] are suffering the same cost of living crisis as everyone else and Andrew Bailey can’t ignore the needs of his own staff. 

“A failure to address pay will result in workers voting with their feet and seeking alternative employment where they are properly appreciated and remunerated.”

Mr O’Donnell stressed that the pay settlement was agreed before the cost of living crisis unfolded. 

The meagre pay deal leaves the pay rise at the Bank far below the pace of inflation, which is still expected to be above 5pc at the beginning of next year.

Staff earning £40,000 or below gained an extra £400 as well as extra holiday entitlement. Mr Bailey is paid £495,000 in salary, three times as much as the Prime Minister.

Sharon Graham, Unite’s general secretary, added: “Workers don’t need lectures from the Governor of the Bank of England on exercising pay restraint. Why is it that every time there is a crisis, rich men ask ordinary people to pay for it?”

Gary Smith, general secretary of the GMB union, called the Governor’s comments a “sick joke”.

“The nerve of Mr. Bailey is scarcely credible. Telling the hard-working people who carried this country through the pandemic they don’t deserve a pay rise is outrageous,” he said.

The looming pay demands from Unite raises the threat of fresh industrial action at the Bank after it was hit by its first strike action in more than 50 years in 2017. 

Union members offered pay increases of 1pc in the face of inflation rising to 3pc picketed its Threadneedle Street headquarters in the City of London, some donning facemasks of then-Governor Mark Carney.

“If people accept lower wages then that just increases tensions in future years,” one source said.

Former rate-setters also criticised Mr Bailey. Economist Andrew Sentance attacked the Governor for speaking “on the hoof”. David Blanchflower, another former member of the Monetary Policy Committee, said employees should tell the Governor to “go shove it”. 

“Workers should actually bargain for wage settlements with cost of living adjustment clauses attached to them,” he said.