Haskel: BofE Should Be Watchful On Labour Costs

Policymaker Jonathan Haskel indicated, Tuesday, that the Bank of England needs to be watchful about rising labour costs as a tight job market means wages might rise faster than productivity and put upward pressure on inflation.

BoE Governor Andrew Bailey says interest rates are likely to rise and investors see a 90% chance of a hike in December.

In a speech to students at the University of Glasgow’s Adam Smith Business School, Haskel said much of the recent rise in inflation was due to global factors such as imported goods and energy prices that were likely to drop out of the figures.

He said he was in “team transitory” on the question of inflation’s persistence. However, there was a risk that wage growth could exceed productivity growth, which has been weak in Britain for more than a decade.