Stagnant wages amid falling unemployment creates headache for BoE

Bank of England governor Mark Carney
Mark Carney

The Bank of England (BoE) has cut its pay growth forecast for 2014 in half after wages stagnated in the first six months of the year despite a pick-up in growth and rapid fall in unemployment, creating "tremendous uncertainty" for the bank's monetary policy committee (MPC).

"Pay growth has been remarkably weak, even as unemployment has fallen rapidly," BoE governor Mark Carney said today while presenting the bank's quarterly inflation report, which cut its May forecast for wage growth from 2.5%

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