BOE dep gov and others appear before the parliamentary Treasury Select Committee
My preview can be found here. Nothing new in this initial headline from the Annual Report from her and external MPC Member Weale.
- if labour mkt continues to tighten expect wage growth to pick up
- difficult to predict timing of wage pick-up
- must be willing to be flexible to respond from surprises from world economy, fin mkts
- once that uncertainty has dissipated expect the economy to warrant a path for bank rate that increases more quickly than implied by market yield curve
That last comment has hawkish tones but GBP not fazed.
GBPUSD still 1.4106 EURGBP 0.7802
- would ordinarily expect wages to grow about 2-3% quicker than productivity in order to generate target inflation
- have judged it appropriate to refrain from voting for rate hike until convinced wage growth sustained at level consistent with inflation target
No time soon then.
BOE's Shafik- Keeping a keen eye on wage growth
