Huskel, a member of the Bank of England’s Monetary Policy Committee, said on the 23rd that wages could rise faster than productivity due to the tightening of the labor market, putting upward pressure on inflation. The Bank of England said it needs to keep an eye on rising labor costs.
In a speech at the Adam Smith Business School at the University of Glasgow, Haskel pointed out that most of the recent price increases are due to global factors such as rising import and energy prices. He agreed with the view that inflation is transient.
However, he warned that wage growth could outpace productivity growth. “The latest data confirms the tightening of the labor market and puts upward pressure on wages. This is welcome from a standard of living perspective, but from an inflationary perspective, wage growth is productivity. We have to keep an eye on it because we need to keep up with the growth. “
Regarding the observation of rate hikes on the market, he pointed out that the background is that the economic outlook has improved compared to the worst period of the new coronavirus. It gave little clue as to the short-term interest rate outlook.