Bank of England Deputy Governor Ben Broadbent said on Thursday that the main reason for wage growth picking up in the UK is the tightness of the labour market. Whilst it is probably that some of the wage rise is due to high inflation, recruitment difficulty is the main cause. The forecasted fall in real incomes was larger in a 12-month period around 2011, he said, adding that although unemployment is around its level a couple of years ago, labour market tightness is greater. There is a question over whether the recent energy price rise is permanent, he said, noting that historically, these swings don't last. 

Market Reaction

Markets have not seen a notable reaction to the latest remarks from BoE's Broadbent.