Broadbent Low pay growth is here to stay

Posted By: James

Tuesday 26th August 2014

Ben Broadbent, the Bank of England’s deputy governor, has warned that workers could face consistently lower pay rises than those they grew accustomed to before the financial crisis. Addressing an audience of economists at the annual Jackson Hole conference, he said that after decades of stable increases in wages, it is possible that growth has “shifted downwards”. Mr Broadbent said that while employment had risen “significantly faster” than the MPC had expected, “pay growth has been much weaker”, delaying a decision to raise interest rates. However, Mr Broadbent added during the speech that there is now a “trade-off between the accuracy of the information about inflationary pressure and its timeliness”, leading experts to suggest he would favour a pre-emptive rise in interest rates.
 

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