The Bank warned that public sector pay deals were pushing up pay across the economy in a move that could potentially stoke inflation further.
It said: “The public sector represents around one fifth of total UK employment and the announced increases are expected to raise whole-economy average weekly earnings by around 0.5 percentage points once these pay deals are fully implemented”.
By contrast, Mr Trump has pledged to slash the civil service by stripping them of the career protections that they currently enjoy.
Inspired by Joe Biden, Ms Reeves has long embraced a more active state and a “modern industrial strategy” that she has previously said is essential to “make” and “shape markets”.
“The Biden administration is rebuilding America’s economic security, strength and resilience,” she said last year.
“We are trying to reduce people’s energy bills. We are trying to bring more good jobs, because it is obviously a massive growth industry,” she told MPs this week.
She also welcomed the rate cut on Thursday, as “welcome news for millions of homeowners and businesses” remaining unrepentant about her decision to borrow more for public spending.
Decisions in the Budget would put the public finances on a “firm footing and reset public spending so our schools and hospitals are properly funded”, she said, as she pledged not to “come back with another load of tax increases in the way that the Conservatives did”.
However, the Bank warned in its latest economic outlook that Ms Reeves’s borrowing plans represented a “substantial near-term loosening of fiscal policy compared with the plans outlined by the previous government in March”.
Claire Lombardelli, the Bank’s deputy governor, added: “Obviously the front-loaded fiscal loosening that the Budget represents means we have got higher inflation [over the next three years]”.
Mr Bailey stressed that the degree to which the Bank would need to keep interest rates higher for longer depended on how businesses responded to the tax raid.
He said: “Broadly the channels work through prices, they work through wages, through employment and they could work through productivity as well.”
While the Office for Budget Responsibility (OBR), the Government’s tax and spending watchdog, has said the greatest impact of this will be in lower wages, the Bank warned that firms could also choose to pass on higher costs to consumers, which would keep interest rates higher for longer as wages continue to rise.
Companies including Wetherspoons and BT have warned they will be forced to increase prices in response to the Chancellor’s decision to raise National Insurance contributions for employers.