Top Bank of England official Ben Broadbent is quoted as saying he's not ready to raise interest rates just yet. As David Pollard reports, new data showing pay growth lagging further behind inflation may underpin the view that the BoE will hold off anyway.
British workers are getting poorer - at least in real terms. If more of them are in work: May's 4.5 per cent unemployment rate was the lowest since 1975. But wages are getting lower too: adjusted for inflation, they saw a 0.7 per cent drop - the sharpest for three years. (SOUNDBITE) (English) SENIOR ANALYST, HARGREAVES LANSDOWN, LAITH KHALAF, SAYING: "That means that we are probably going to get a bigger squeeze on consumers, because stuff in the shops is rising in price but their wages aren't compensating them. And that's going to mean probably higher levels of debt, probably less consumer spending as well, and not that's not particularly positive for the U.K. economy." If it ratchets up pressure on the government over an apparently weakening economy, it might take the pressure off the Bank of England. It shocked markets last month when three out of five policymakers voted for a rate hike. But now its deputy governor for monetary policy, Ben Broadbent, is reported as saying he's 'not ready yet' for that. SOUNDBITE (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "For now we will see more doves than hawks. And our view is that the Bank of England will remain like for quite some time with a rate cut still looking quite elusive despite the fact that there are at least two members of the MPC certainly positioned in that hawkish camp." Broadbent's comments were made to a Scottish newspaper. Growth, he said, had been 'OK'. But it was still 'very difficult' for policymakers to judge whether there'd been a significant improvement in the UK economy.