BoE’s Pill cites persistent pay growth and underlying inflationary pressures

At a conference today, BoE Chief Economist Huw Pill referred to today’s UK labor market data, noted that wage growth remains “quite sticky at elevated levels,” which he characterized as “hard to reconcile” with the inflation target, given current productivity growth expectations.

While acknowledging the significant disinflation seen in recent months, which has allowed for a reduction in monetary policy restrictions, Pill cautioned that “does not mean it is job done”.

He emphasized that despite some easing in headline inflation, “some underlying inflationary pressures” persist in the UK economy.