BoE: Wage growth is an important factor - ING

James Smith, Developed Markets Economist at ING, suggests that for the UK economy, where inflation has been more lacking, wage growth has continued to outperform.

Key Quotes

“Pay is now rising at the fastest rate in over two years, and Bank Agents are suggesting that this could be the best year for pay settlements since the crisis. Admittedly it is still early days. A portion of these gains is related to the higher living wage level, while weakness in the first quarter of 2017 has been flattering the year-on-year rates of wage growth. This latter point means we've probably hit a short-term peak in wage growth with base effects set to kick in.”

“But even so, the momentum remains solid (albeit a little slower than three or four months ago), and we don’t expect the data before August to change policymaker’s minds that the overall direction is upwards. Remember that optimism on wage growth is central to the Bank's rate hike rationale.”

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.