BOE’s Saunders: Weak sterling means inflation is likely to rise above 2%

The Bank of England (BOE) MPC member Saunders is now crossing the wires, via Reuters, making a scheduled speech about the UK labor market, in London.

Key Headlines:

Labor mkt data will probably be one of key guides on which direction rates go

Little sign of significantly higher pay growth for 2017

Recent weakness in pay due to low productivity growth and low headline inflation

Subdued wage growth trend in part reflects structural changes

Avg weekly earnings growth remains modest, at 2-3% yoy

Shouldn’t set monpol to rule out sub-5% unemployment unless there’s evidence of higher wages or long-term inflation expectations

MPC’s target is for inflation not unemployment but jobs are important

Recent UK growth stronger than expected

Weak sterling means inflation is likely to rise above 2%