BoE to keep very close eye on inflation’s impact on wages – Broadbent

The Bank of England will keep a very close eye on possible second-round effects on wages from a recent jump in inflation, Deputy Governor Ben Broadbent said on Friday, a day after the BoE said consumer inflation was likely to hit 4%.

“I would say the judgements about labour market frictions dissipating are probably more uncertain than those on the trade and goods side of things,” Broadbent said in a presentation to businesses which take part in BoE surveys.

Governor Andrew Bailey, speaking during the same webcast, said labour shortages had been the largest theme in his recent discussions with businesses.