A Bank of England poll of decision makers at British businesses shows that expectations for wage growth cooled last month, falling to 4.1% in the three months to July from 4.2% in the three months June. On a month-by-month basis, expectations for wage growth increased to 4.1% from 4.0%. Rob Wood, chief UK economist at Pantheon Macroeconomics, said easing inflation and recruitment difficulties will help slow wages more decisively in the second half of the year. “Inflation, wage growth, inflation expectations, recruitment difficulties and employment growth have all eased since the Monetary Policy Committee raised rates to their peak, suggesting tight monetary policy is working,” he said, adding: “But there are also enough signals for us to expect wage growth and inflation to linger above target consistent rates for longer than the MPC expects.”
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