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Haskel: Implications of current wage inflation
It’s my pleasure to be here at the Bank of England Watchers’ Conference, and my thanks to the Qatar Centre for Global Banking & Finance and the Macro Money and Finance society for organising the event and inviting me to participate. Since the panel is on the labour market, I want today to set out briefly why I think wage growth is as high as it currently is. But first, why should a monetary policy maker care about wage growth? CPI inflation in the year to August 2023 was 6.7%. This is much lower than the 10-11% we had over the winter, but still well above the MPC’s 2% target. The MPC expects inflation to fall ... (full story)