Accelerating wage growth in Britain worries Bank of England
Date
6/11/2024 8:34:26 AM
(MENAFN) Experts anticipate that official data set to be released today will reveal an uptick in wage growth in Britain, marking the first acceleration in nine months. This development presents a challenge for the bank of England as it seeks to mitigate inflationary pressures before considering interest rate cuts.
According to a survey, analysts project a 6.1 percent annual increase in wages for the three months leading up to the end of April. This data is expected to include April, a month that saw a 10 percent rise in the minimum wage.
The accelerated pace of wage growth in Britain is poised to heighten concerns about mounting inflationary pressures stemming from labor shortages in the market. This scenario complicates the central bank's efforts to lower interest rates from their highest levels in 16 years.
Despite keeping interest rates unchanged last month, the Bank of England signaled potential future rate cuts if inflation is contained. While the bank voted to maintain the interest rate at 5.25 percent, Governor Andrew Bailey expressed optimism about the economic trajectory. Bailey noted "encouraging news" on inflation, which the bank anticipates nearing its 2 percent target between April and June. However, he emphasized the need for further evidence that inflation will remain subdued before considering any interest rate adjustments.
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