BoE Deputy Governor Jon Cunliffe told a parliament committee, “pay growth has established itself in the 2.5-3 percent range.” However, “latest readings do not signal strongly that pay growth will make the next step to establish itself firmly in 3 percent territory in line with the May forecast”. He added that BoE may “still be underestimating supply in the labour market.

And, Cunliffe also said the MPC’s approach in monetary policy “does not incorporate a judgement on the outcome of Brexit”. And, it would be “mistaken to set policy going forward in anticipation now of any particular Brexit outcome.” The “best course” is “until there is clarity on Brexit is to react to the economy as it evolves, conditioning our forecasts on neutral assumptions about Brexit outcomes.”

Cunliffe’s questionnaire for Treasury Select Committee re-appointment hearing.

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