Dave Ramsden says one of the reasons for his vote against raising interest rates was that workers were showing pay restraintBritain’s unusually weak pay growth could be caused by workers reining in their demands due to Brexit uncertainty, a senior Bank of England official has said. In his first speech since joining the Bank from the Treasury, Dave Ramsden said the impact of the EU referendum on inflation had persuaded him to vote against an increase in interest rates earlier this month. But Ramsden, one of the Bank’s deputy governors, said that workers were showing pay restraint even though unemployment had continued to fall and currently stood at a 42-year low of 4.3%. The Bank’s forecast of 0.4% growth each quarter over the next three years would leave it 2% smaller by 2020 than envisaged in its last pre-referendum forecast. “Were that uncertainty to be lifted, I can see a case why UK whole economy demand could grow more strongly, more in line with, for example, recent manufacturing indicators.

Source: The Guardian November 20, 2017 18:32 UTC