LONDON (Reuters) – Recent British labor market data shows a slowdown in the economy, which should lead to a slowdown in wage growth and a reduction in inflationary pressure, Swati Dhingra, member, said on Tuesday. of the Board of Governors of the Bank of England (BoE).
“Now that the labor market is really easing… it’s very difficult to imagine where the additional boost in wage growth will come from,” Swati Dhingra said at an event organized by the Royal Economic Society of Great Britain.
“We should see some easing of domestic inflationary pressures,” she added.
Swati Dhingra, like BoE chief economist Huw Pill on Monday, said the wage data gave an exaggerated picture of the strength of the labor market.
“Other measures, including forward-looking measures, seem to suggest wage growth in the 5-6% range,” she said.
Before the COVID-19 pandemic, when inflation was most often close to its 2% target, wage growth was generally in the 3% to 4% range.
Swati Dhingra, who has consistently voted against rate hikes this year, reiterated her view that the BoE would have been better off raising interest rates more slowly.
“A more moderate trajectory of interest rates over a longer period would have been preferable, as it would have allowed a much more balanced transmission to businesses and households, without the sharp peaks and troughs that accompany rising interest rates at very high levels,” she said.
(Written by David Milliken, French version Corentin Chappron, edited by Kate Entringer)
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