Bank of England Inflation Report

In his latest inflation report press conference, Mark Carney, Governor of the Bank of England (BOE), concluded that the UK economy “is returning to a semblance of normality”. The BOE have reduced their central estimate of “slack” in the economy to around 1% of GDP but also their estimate of wage growth, which they noted has been “remarkably weak”. As a result, the BOE will now be “placing particular importance on the prospective paths for wages and unit labour costs”. Unlike the previous quarter, Carney offered no sporting analogy on how the economy was performing, most likely because of England’s dismal performance at the World Cup, a similar fate he will be keen to avoid in his quest for the “prize of a strong, sustained and balanced expansion”.