UK ‘inflation’ likely to pick up: BOE

Bloomberg

UK inflation pressures are likely to pick up even if the Bank of England’s forecasts for wage growth and productivity gains aren’t met, according to Deputy Governor Dave Ramsden.
In a speech in London, Ramsden said that he’s on board with BOE’s collective view that limited and gradual increases are needed
to control inflation. Labour market tightness and rising pay pressures are likely to support price gains in the medium term, he said.
At the same time, he said officials had “predicted higher nominal wage growth in the past, and have been serially disappointed.” Real wage growth since the Brexit vote had been “strikingly weak” he said. It “would be foolish of me to rule out being disappointed” on pay gains again.
Nevertheless, “Even in that case it seems likely to me that, given the gradual move into excess demand that we expect, unit labour costs and inflationary pressure would still pick up as in our August forecast.” Ramsden voted with the rest of his colleagues to hike interest rates to 0.75 percent in August, and markets are pricing in another move in May next year.