(RTTNews) – UK workers responded to uncertainties about the outlook by showing even more flexibility in their wage demands since the EU referendum, Bank of England Deputy Governor Dave Ramsden, said in London.
At the November meeting, Jon Cunliffe and Dave Ramsden were the only two members in the monetary policy committee to vote against a rate hike. The bank had lifted the rate by a quarter point early this month.
Ramsden said he was willing to wait for more evidence on the evolution of wage and domestic cost growth before beginning to withdraw some monetary stimulus.
“The weakness in real wage growth, and the subdued nature of domestically generated inflation mean I am not yet ready to discount the idea that labor market flexibility is continuing to intensify,” Ramsden said in a speech.
“I attach some weight to the idea that workers have responded to the changing outlook by showing greater flexibility in their wage demands,” said Ramsden.
Further, he noted that GDP growth has slowed from average quarterly rates of 0.7 percent in 2014 and 2015 to 0.4 percent more recently.
“For those of you who, like me, have had to assess and categorize past UK slowdowns as either U- or V-shaped, I consider what we are witnessing as more of a saucer-shaped slowdown and pretty unusual for that,” he said.
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