Nothing is more important for the Bank of England right now than wages. The unemployment rate has reached the top end of the MPC’s equilibrium range, yet nominal wage growth is anemic and real wages continue to fall. Meanwhile, hyper-bullish surveys have taken leave of the average weekly earnings numbers. Various explanations have been posited on a macro-level, from the labour supply to inequality. On a micro level, we make two observations that suggest caution on wage growth.
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