HALISTER1: U.K. Pay Growth to Rise Toward 3% in Coming Year, JPMorgan Says

U.K. Pay Growth to Rise Toward 3% in Coming Year, JPMorgan Says

(Bloomberg) -- Falling inflation expectations may be reducing pay growth by up to a relatively modest 0.4ppt, JPMorgan economist Allan Monks writes in client note.
  • As the drag from the commodity price slide fades, a clearer uptrend in inflation is likely to emerge, supported by firmer Unit Labor Cost growth
  • Models show a period of low inflation that is expected to be transitory may not have a large influence on wage setting; even when inflation rose above 5% in the U.K., private sector regular pay growth remained stable and below 2%
  • Still waiting for all-important January data on pay deals although data through to December didn’t show much impact from low inflation
  • NOTE: Pay growth “seems likely to continue at modest rates,” Simon Caunt, David England and Imogen Shepherd say in post on the BOE’s staff blog earlier
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Allan Monks (JP Morgan Chase)

To de-activate this alert, click here

UUID: 7947283