BoE MPC member Michael Saunders said the “elevated unemployment” is a sign that UK still has “too much spare capacity” and that would “push inflation below target”. That could cause a “slow, incomplete recovery”. Additionally, there are risks of “household caution overspending”, and “fears of unemployment”.
Saunders added, “I will continue to put high weight on labour market data in judging whether spare capacity in the economy has been used up, and hence whether we are on track to return inflation sustainably to target in line with our remit.”
