What is the Bank of England watching as it considers interest rates to peak? | – #Bank #England #watching #considers #interest #rates #peak
MANCHESTER, England, Feb 6 (Reuters) – The Bank of England has signaled that the tide is turning in the fight against high inflation after a string of interest rate hikes – but it said it was too soon to declare victory.
At a press conference on Thursday, BoE officials revealed the economic indicators they will be watching most closely as they decide whether to raise rates again or keep them at 4%.
England’s low developing, high inflation Here’s what some of these indicators of the economy look like:
Labor fee increase
Payout is perhaps the biggest concern for the BoE, with various indicators of income growth reaching what the central bank calls unsustainable levels if inflation falls back to its 2% target.
Employers increased their wages, according to provisional data from human resources data provider XpertHR on Friday january is about to reach an average of 6% per month, which is the highest indicator in the last 30 years.
Official labour salary increase data, as well as state-supported salary distortions the coronavirus pandemic except for the period, it shows a record increase in the private sector’s income.
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Reuters Graphics INFLATION EXPECTATIONS
BoE, in recent months inflation was pleased to see that public expectations of labour The prospect of a fee spiral now seems more distant.
But politicians stress that these expectations remain high by historical standards.
Long-term as measured by the Citi/YouGov survey inflation expectations have returned to a range of just above 3% of the pre-pandemic norm.
Reuters Chart INACTIVITY
Last week, the BoE cut Britain’s potential growth rate – the rate at which the economy can grow before it begins to generate excess inflation – to just 0.7%.
It reflects a combination of the pandemic, Brexit and a failing health service struggling to treat people in time Britain refers to the damaged supply side of the economy – putting many out of work.
Britain it still has higher employment and lower unemployment than most EU countries, but there are signs that it is struggling to recover. Labor force activity is still well below pre-pandemic levels, with only Italy doing worse on this front among G7 countries.
Reuters GraphicsSERVICES INFLATION
BoE governor Andrew Bailey said consumer price inflation, which hit 11.1% in October, had turned the corner. The BoE’s forecasts show inflation at 3% for one year, well below its target of less than 1% for two years.
Unlike imported goods, the strength of inflation in services, which reflects domestic price pressures, is a source of concern. Members of the Monetary Policy Committee see these data as an indicator of core inflation in the economy.
Consumer services including restaurants, hotels, transport and mobile phone contracts prices rose 6.8% year-on-year in December, the largest increase since 1992.
Reuters Graphics BUSINESS INVESTMENT
Bailey also highlighted investment and productivity – two of Britain’s weak points – as important drivers of inflation and the outlook for the economy.
According to a Reuters analysis of data from the Organization for Economic Co-operation and Development, the United States, France or unlike Germany, business investment in Britain remains below its level in mid-2016, when the Brexit vote was held.
Reuters GraphicsReporting by Andy Bruce; Edited by Catherine Evans
Our standards: Thomson Reuters Trust Principles.
2023-02-06 20:47:00
Source – reuters
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