“The labour market is central to the inflation aspect,” Haskel said at a seminar at City University’s Bayes Business School when asked if he now thought it possible inflation would hold at 2% rather than rise later this year.
Last month the BoE forecast inflation would fall below 2% in the second quarter of 2024, before rising towards 3% later in the year, but last week BoE Deputy Governor Dave Ramsden said he thought inflation might now stay close to 2%.
Haskel said labour market tightness – as measured by the ratio between job vacancies and unemployment – was reducing, but it was unclear if it was falling fast enough to keep inflation on target.
“Reasonable people might reasonably disagree about the risks,” Haskel said.
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