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MNI INTERVIEW:UK With Higher NAIRU More Prone To Wage Pressure

(MNI) London

NIESR Deputy Director Stephen Millard looks at the implications of a likely BOE revision of its estimate of NAIRU.

The Bank of England would look at moving its estimates for future wage growth higher if as is likely it includes an upward revision of its view of the level of joblessness compatible with stable inflation in its latest forecast round to be released after this week’s monetary policy meeting, the deputy director of the National Institute of Economic and Social Research told MNI.

A shift higher in the Bank’s view of the so-called non-accelerating inflation rate of unemployment, or NAIRU, could accompany a post-Covid labour market stock-take expected in Thursday’s February Monetary Policy Report, though Monetary Policy Committee members will have factored it into their own calculations for some time, said Stephen Millard, Deputy Director at the National Institute of Economic and Social Research and a former manager in the BOE's Monetary Analysis division.

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The Bank of England would look at moving its estimates for future wage growth higher if as is likely it includes an upward revision of its view of the level of joblessness compatible with stable inflation in its latest forecast round to be released after this week’s monetary policy meeting, the deputy director of the National Institute of Economic and Social Research told MNI.

A shift higher in the Bank’s view of the so-called non-accelerating inflation rate of unemployment, or NAIRU, could accompany a post-Covid labour market stock-take expected in Thursday’s February Monetary Policy Report, though Monetary Policy Committee members will have factored it into their own calculations for some time, said Stephen Millard, Deputy Director at the National Institute of Economic and Social Research and a former manager in the BOE's Monetary Analysis division.

Keep reading...Show less