Work, Wages and Monetary Policy
Speech given by
Andrew G Haldane
Chief Economist, Bank of England
National Science and Media Museum, Bradford
20 June 2017
The views expressed here are not necessarily those of the Bank of England or the Monetary Policy
Committee. I would like to thank Will Abel, Shiv Chowla, Brad Speigner and Arthur Turrell for their
help in preparing this text. I would like to thank Alina Barnett, Nick Bate, Tom Belsham, Stuart Berry,
Melissa Davey, Kristin Forbes, Rich Harrison, Will Holman, David Latto, Clare Macallan, Gareth
Ramsay and Michael Saunders for comments.
It is wonderful to be here in Bradford, just a few miles away from where I grew up. The City has of course a
rich commercial history dating from the Industrial Revolution. Back then, it was a thriving hub for textiles and
other manufacturing industries. The City's architecture bears witness to the rich civic investment that took
place around this time, with the public and private sector often working in partnership. The decline of the UK
century was mirrored in Bradford's own fortunes. Like many industrial
textiles industry from the mid-20th
cities, Bradford went through a wrenching transition and still bears some of the scars.
But that retreating tide now seems, decisively, to have turned. I am delighted to see civic and commercial
investment beginning to return to Bradford over the past few years. Those scars are starting to heal. Of
course, there is plenty still left to do with parts of the City still among the poorest in the UK. But compared
with when I last visited a few years ago, there is now a real sense of opportunity and optimism in Bradford,
lifting the spirits of the businesses operating here and the people living here.
Regional visits such as these are the most useful and most interesting part of my job. Over the course of two
days, I will speak and listen to over two dozen businesses of all shapes, sizes and sectors. I will speak and
listen to a number of charities, not-for-profit enterprises and schools. I will do a walkabout in Sunbridge
Wells, an underground parade for retail and leisure and a great example of that civic investment and
entrepreneurial spirit operating once again in the City. And I will have with me a film crew, distilling some of
the key bits of my visit to a wider audience across the whole of the UK.
under Mark Carney's leadership,
This is part of a renewed effort by the Bank, to engage with as wide a
cross-section of people, and as broad a range of views, as possible. Events of the past twelve months -
-
indeed, events of the past twelve days have illustrated just how important it is for policymakers to do so.
To listen as often as we speak; to try and better understand the issues people tell us matter to them, rather
than the issues we tell them ought to matter to them; to close that gap between "us" and "them".
With the
fortunes of the economy uncertain, the value of this grassroots intelligence has never been greater.
So where is the UK economy at this critical juncture? Overall, the picture is a reasonably reassuring one.
The UK economy has grown for 17 consecutive quarters. Output has increased by around 2% over the past
year, just a little below its historic trend rate. Employment in the UK is at its highest rate since 1973.
Unemployment is currently at its lowest since 1975. Confidence among businesses and consumers remains
solid. And inflation, which had been below its 2% target for three years, has bounced back sharply recently.
Nonetheless, the UK economy clearly does face a number of important challenges. Consumer price inflation
above the government's inflation target of
(CPI), at 2.9%, is currently well 2%. It is likely to move further
above that target during the course of this year, probably reaching 3%. Meanwhile, growth in the UK has
sharply since the end of last year, as higher prices squeeze households' purchasing power in
slowed fairly
the shops. Activity in the UK economy remains below its long-run potential. And, of course, all of this is
before the full effects of Brexit have been felt.
on the Bank's Monetary Policy Committee (MPC)
Facing these uncertainties, a key issue for policymakers is
how best to navigate these risks and the trade-offs that currently exist between wages and jobs, activity and
inflation. These risks are genuinely two-sided. Keeping monetary policy too loose for too long, to support
jobs and activity, might run unnecessary risks with the inflation target. But tightening monetary policy too
soon or too quickly, to curb inflationary pressures, might run unnecessary risks with output and jobs.
Given the lags with which it operates, these monetary policy judgements depend not just on inflation and
output today, but on their expected path in the period ahead. For example, current UK inflation is being
boosted significantly, but temporarily, by price pressures arising from sterling's
depreciation last year. Once
these effects abate, the path of inflation will depend on the evolution of domestic costs. The behaviour of
wages, and developments in the jobs market more generally, will be crucial in determining that evolution.
That being the case, I wish to begin by discussing some of the factors affecting wage growth, in the recent
past and in the future, including those arising from structural shifts in the nature of work. I will then turn to
the implications of recent developments in the economy for monetary policy in the period ahead.
Work and Wages
Wages have been surprisingly weak for much of the period since the global financial crisis. Chart 1 plots
successive Bank of England forecasts of wage growth since 2012. Wage growth in the UK has persistently
disappointed to the downside, on average by around 1 1⁄4 percentage points one year ahead. Part of the
explanation lies in weak UK productivity, a key determinant of firms' ability to pay workers. This, too, has
persistently disappointed to the downside, with a mean error of around 1 percentage point one year ahead.
Nonetheless, it is clear that wages have been weaker than can be explained either by slow productivity
growth or by the other factors which typically affect wages, including the degree of slack in the labour market.
components from the Bank's wage
This can be seen by looking at the unexplained equations (Chart 2).
These residuals have been predominantly negative over recent years. That is despite on-going refinements
to the Bank's judgements on
the labour market, as wages have come in short of expectations.
This weakness in wages is the more surprising because it has come against a backdrop of a booming jobs
market in the UK. Employment has increased by around 2.5 million people since 2011. Unemployment in
the UK has fallen from its peak of 8.5% in 2011 to almost 4.5% currently. It has also fallen significantly in
every region in the UK. Here in Yorkshire, unemployment has fallen from 10% to around 5% over the past
few years, its lowest level since the 1970s.
Historically, there has been a reasonably strong and stable relationship between unemployment and wage
growth - the so-called Phillips curve. As unemployment has fallen recently, this Phillips curve relationship
would have led us to expect wage growth to pick up. That, plainly, has not happened. Over recent years, the
Phillips curve relationship has been anything but strong and stable (Chart 3). And that same flatness in the
Phillips curve has been found in a number of other countries (Chart 4).
There are many potential causes of the weak wage puzzle over recent years.1 Some of these are likely to
have been short-lived, such as the impact of low actual and expected levels of inflation globally. Others are
likely to have been longer-lived, such as the impact of the financial crisis on slack in the labour market and
workers' willingness to move between jobs
in search of a pay rise. A third set of factors are structural in
nature. For example, there is evidence technology and globalisation may have weakened the bargaining
power of workers, leading to a secular fall in the share of income going to workers in several countries.2
Another set of longer-term factors arise from the changing nature of work and the shifting relationship
between employers and employees. One such shift, which has operated over a number of decades, is the
decreasing incidence of unionisation and collective bargaining in the workforce. Other, more recent, shifts
include the increasing incidence of self-employment, flexible and part-time working and zero-hours contracts.
These shifts in the nature and quality of work have become very topical recently. The UK government has
commissioned an independent review, chaired by Matthew Taylor, to look into their impact.3
These changes in working customs, contracts and practices have been given a variety of descriptions.
Some have called them the "casualisation" of
work, with jobs becoming less structured and more informal.4
Others have called them the "gig"
economy, with work becoming less four-cornered and more task-oriented.5
"insecurity" in the jobs
Other still have associated these changes with heightened market, with implications
for households' incomes and spending.6 All of these descriptions recognise that these shifts affect the
quality quantity
of work in the economy, even as the reaches levels not seen for many decades.7
Because the causes and consequences of these shifts in working practices are many and varied, no single
description of them is perfect. Surveys suggest that, for some people, the move to greater self-employment
and part-time working has been a welcome development, increasing the degree of control and flexibility over
their working lives. For others, these same shifts are less a lifestyle choice than a necessity, increasing their
degree of uncertainty and concern about income and jobs. Gigging can be fun for some. But not everyone
wants to be a roadie when it comes to the world of work.
Perhaps a more neutral, if less catchy, description of these trends is needed. In terms of their economic
work more "divisible" than in the past.
impact, these trends have had the effect of making The fall in
unionisation has made workers more divisible at the level of the profession, sector or firm. Wage bargaining
1
See, for example, Abel et al (2016).
2
IMF (2017).
3
See www.gov.uk/government/groups/employment-practices-in-the-modern-economy
4
Solow (2015).
5
For example, Hook (2015).
6
Hudson-Sharp and Runge (2017).
7
for some discussion of 'job quality'.
Chapman (2017). Also see OECD (2017)
is less likely to be collective, and more likely to be idiosyncratic, these days. Similarly, the rise in
self-employment and part-time working has made work more divisible at the level of the individual worker.
People are more likely these days to be paid by the task or the hour. In short, these shifts have meant work
and workers may have become more diffuse, more granular, more divisible than in the past.
This increased "divisibility" of jobs and work potentially raises a number of important issues, economic and
social, about the relationship between employee and employer, many of which are being tackled by the
Taylor Review. I want to explore just one dimension - the extent to which they may have influenced
wage-setting in the economy. In particular, it is worth exploring whether these changes may have
contributed, in any way, to the weak wage puzzle experienced over recent years. And, if so, given that these
trends are likely to persist, whether they carry implications for the durability of wage weakness too.
Why, in principle, might these changes affect wage behaviour? One story here is
"divide and conquer".
There is power in numbers. A workforce that is more easily divided than in the past may find itself more
easily conquered. In other words, a world of divisible work may reduce workers'
wage-bargaining power.
Another story is that more flexible working practices may have induced previously inactive people back into
work. With more people willing to enter employment, upward pressure on wages may be dampened even as
labour demand picks up given the higher rate of labour market participation in the economy.
In either case, the downstream consequences would be similar: weaker wage growth than in the past, for a
given level of unemployment or demand in the economy. That is the theory. What empirical evidence is
there to support these stories?
The Changing Nature of Work
Let me start by outlining some of the facts on the changing nature of work and the divisibility of labour.
At the level of the profession or sector, one clear diagnostic comes from the changing pattern of unionisation.
In 1990, around 38% of employees in Great Britain belonged to a trade union. That membership rate has
steadily declined over time, extending a broad trend apparent since at least the mid-1970s. In 2016,
membership of trade unions stood at 23% (Chart 5). Today, around 6 million employees are members of
trade unions, less than half the peak of around 13 million in the late-1970s.
That fall in union membership rates has been broadly based. It has applied to both males and females,
although the fall in membership has been greater among males with rates falling from 35% in 1995 to 21%
today. It has occurred in both the public and private sectors, although public sector employees remain
around four times more likely to be union members. And it has been true across all age groups, although
rates of union membership tend to be lowest among younger cohorts, with rates among the 16-24 age cohort
8% compared with 30% for those aged 50 and over.
The fact that unionisation rates have been falling within each age cohort over time, and are lowest among
the young, suggests the downward trend in rates of unionisation may still have some distance to travel. For
example, if unionisation rates were to continue to decline at the same average rate as over the past decade,
then they are likely to fall to around 10% of employees, or 3 million people, within a generation.
A more recent labour market trend is the increased importance of self-employment. In 1980, the
self-employed accounted for less than 8% of the workforce. In 2016, they stood at an historic high of around
15%, or around 4 1⁄4 million people (Chart 6). The increase in self-employment has occurred within each age
cohort, although the pick-up has been greatest among the old. In 1990, 30% of the self-employed hired
other workers. Today, that share is around 16%, with more of the self-employed working independently.8
As with decreasing unionisation, it seems unlikely these trends will reverse. As older workers are more likely
to be self-employed, the ageing of the population will by itself generate further increases. As a rough
ready-reckoner, were the incidence of self-employment in each age group to remain constant, the ageing of
the population would by itself generate an extra 100,000 self-employed people over the next decade. If
numbers in self-employment kept on increasing at the same rate as in the past, the increase could be much
more substantial, perhaps as much as an extra 1 million people over the next decade.
- -
A more recent phenomenon in the labour market and one which has attracted particular attention is the
"zero hours" contract. As recently as 2010, 0.6% of those in employment were on zero hours contracts,
around 170,000 people. By 2016, that had increased to almost 3% of employees, or almost 1 million
workers (Chart 7). It is unclear how much of the measured increase in zero hours contracts is a genuine
trend, rather than reflecting increased awareness and reporting. But if those rates of expansion continued,
the share of employees on zero-hours contracts would reach around 7% within a decade.
Trends in temporary and part-time work have been less striking, but have gone in the same direction.
declined
Between 1997 and 2008, temporary work as a share of employment. But since 2008 it has
increased. There are currently around 200,000 more temporary workers than before the financial crisis.
Prior to the crisis, around 25% of those in employment worked part-time. Since the crisis, that share has
increased to around 26%, or around 8 1⁄2 million workers.
If we took together self-employment, part-time and temporary working and zero-hours contracts, their share
of the workforce has probably risen to around 43%, or around 13 1⁄2 million workers.9 The corresponding
figures back in 2000 would have been around 39% of the workforce, or around 10 1⁄2 million workers. This is
not a majority, but it is a significant and rising minority of workers.
8
For example, Blanchflower and Machin (2017).
9
There needs to be caution when simply summing these categories as some of them probably overlap, generating double-counting.
These trends in self-employment, temporary and part-time employment are based on survey data. Those
broad trends are corroborated if we look at data on job vacancies rather than employment.10 By searching
for words such as "flexible hours" and "contractor" in published job ads, we can track
"self-employed", trends
in the demand for jobs with these characteristics. This suggests all three job classifiers have maintained or
increased their shares of vacancies since 2008 (Chart 8).
-
On the face of it, these trends less union membership, more self-employment, more zero hours contracts,
-
more part-time and temporary work might suggest work has become more fluid and insecure. But we
should be cautious about jumping to that conclusion. Over the past three years, there has been a marked
increase in the share of temporary workers reporting they do not want a permanent job. And since 2012, the
share of part-time workers reporting that they do not want a full-time job has also been on an upward
trajectory.
Whether these trends in employment are voluntary or involuntary, good news or bad, an opportunity or a
threat, they may still carry implications for wage-setting. That is true even if it is only a (rising) minority of
workers being affected by these changes. The marginal worker is much more likely than in the past to be
self-employed, to work flexibly and to not be part of a union. And, economics and employers tell us, it is the
marginal worker whose pay matters most when determining wage pressures in the economy at large.
Implications for Wages
So what does the evidence tell us about the potential effects of these changes in patterns of work on wages?
One source is empirical research on wage behaviour. This literature is best-developed in the area of
unionisation. It suggests there is a clear wage premium associated with trade union membership, even once
we take account of differences in workers' skills, sectors and regions.11
There are a number of possible reasons for this wage premium, including the greater bargaining power union
membership confers. There are also a wide range of estimates of the scale of this wage premium. These
appear to vary widely across different countries, regions and sectors. Nonetheless, estimates of the
aggregate wage premium in the UK are typically centred in the range 10-15%.12 There is evidence this wage
premium may have shrunk over time, perhaps reflecting diminished union membership or increased
competition in the labour market.13 And there is also evidence decreased unionisation may have made
wage-setting more dispersed and localised.14
10
This is based on data from Reed on around 15 million advertised job vacancies between 2008 and 2016. There are various possible
reasons for being included within a job vacancy description. These may include reduced National Insurance
'self-employment'
contributions and increased flexibility over working hours.
11
Lewis (1986).
12
Bryson (2014).
13
Bryson (2014).
14
Gregg et al (2014).
Given that the number of unionised workers has been falling over time, the wage premium from unionisation
will have had a direct, "batting average", effect on wage growth as fewer workers benefit from this premium.
For example, with a wage premium of 15%, the shift in union membership since 2000 would have subtracted
around 1 per cent from wages over the period, or less than 6 basis points from average annual wage growth.
This effect is modest but, to my mind, is very likely a lower bound. For example, it takes no account of the
broader spill over effects of unionised wages on the wages of other workers.
There is evidence self-employment, flexible working and zero-hours contracts also affect wages, after
controlling for differences in occupations and locations. For example, self-employment has been found to be
associated with a wage discount for workers, perhaps in the region of 15%.15 The reasons given for this
discount include the fact that workers may be willing to accept a lower wage in return for the increased
control and flexibility that comes from self-employment.16 There may also be problems in recording
accurately income from self-employment.
For workers on temporary contracts, there is also evidence of a wage discount, perhaps of around 5-6%.17
For agency workers, the wage discount is smaller, perhaps around 2 1⁄2%. For zero hours contract workers,
it is larger at around 7%. If we take trends in self-employment, temporary and zero-hours contract workers
since 2000, we would expect these to have collectively directly subtracted from wages by around 0.6 per
cent, or around 4 basis points from annual wage growth.18 Again, although these estimates are modest they
probably understate the true effect, given they ignore any behavioural effects of these trends.
Wages are not the only way in which these shifts in the nature of work may have affected labour market
behaviour. As with unionisation, these shifts may also have widened the dispersion of wage rates within a
given sector or occupation, with less collective-bargaining and more localised rates of pay. Vacancies data
lend some support to this hypothesis. Charts 9 and 10 plot the distribution of offered wage rates in different
occupations, comparing job vacancies containing the terms "self-employment" and "flexible hours" with those
that do not.
These vacancies data probably capture a particular segment of the self-employed and flexible working
population, who differentiate their pay by more than the typical self-employed worker. Indeed, the
vacancies here are advertised by firms who invite applicants to become
'self-employed' self-employed before
hiring them. Nonetheless, these "violin" plots of offered wage distributions play an interesting tune. The
distribution of offered wage rates is far wider for vacancies associated with self-employment and flexible
hours than those without, within a given occupation. There is far less evidence of a "going-rate" for jobs
associated with the self-employed and flexible working. This sounds intuitively plausible.
15
Inferred from Bradley (2016), using the mean pay of the self-employed compared to employees.
16
Hamilton (2000).
17
Gardiner (2016).
18
Because self-employed workers are not included in statistical measures of average weekly earnings, the self-employed effect would
not have shown up arithmetically in this wages measure. But there will still likely be general equilibrium effects on wage-setting in the
economy for those who earn a salary.
A final piece of evidence, albeit indirect, comes from historical data. The move towards greater
self-employment and less unionisation is, in some respects, a shift back to the future in the nature of work.
Prior to the Industrial Revolution, and indeed for some years after it, most workers were self-employed or
worked in small businesses. There were no unions. Hours were flexible, depending on what work was
needed to collect the crops, milk the cows or put bread on the table. Work was artisanal, task-based,
divisible.
While the read-across to work patterns in the 21st century is far from exact, there are some parallels. That
being the case, one question is how wage- and price-setting behaviour operated during this earlier period of
more "divisible" labour markets. Were any of today's wage patterns evident then? The data we have on
wages and output in earlier centuries are partial and imperfect, but nonetheless tell an interesting story.
Chart 11 plots UK Phillips curves over three periods: 1500-1700 (pre-Industrial Revolution); 1860-1950
(post-Industrial Revolution); 1950-1977 and 1977 to date (post-war period). In each case, wage inflation is
measured on the y-axis and an estimate of the output gap on the x-axis. In the post-war period, the Phillips
curve conforms to type. Since 1950, it has a clearly positive slope (less slack in the economy is associated
with higher wage inflation) and an intercept which is positive (reflecting positive trend inflation).
The Phillips curves covering the periods either side of the Industrial Revolution are more interesting. They
share one important similarly and have one important difference. The similarity is that both are associated
with an average inflation rate of around zero. This is consistent with the price level being broadly stable over
these periods.
The striking difference is in the slope of the Phillips curve. The post-Industrial Revolution Phillips curve has a
conventional upward slope, similar to that operating after 1950. Higher growth or lower unemployment is
associated with higher rates of wage and price inflation. The pre-Industrial Revolution Phillips curve is
altogether different; it is as flat as a pancake. Indeed, it bears a close resemblance to the Phillips curves
which have operated, in the UK and globally, since 2008.
There are many potential explanations of this flatness in the pre-Industrial Revolution Phillips curve, including
noisy data. And its similarity with the present-day Phillips curve may be purely coincidental. Nonetheless,
this pattern is at least consistent with a shift in working practices, towards a more divisible, idiosyncratic
workforce, having contributed to a flatter Phillips curve relationship.
None of this evidence is definitive or decisive. Taken together, however, it is at least suggestive that recent
trends in the nature of work may have had some bearing both on wage-setting behaviour in general and on
the weak wage puzzle in particular. Shifts in working patterns seem very unlikely, by themselves, to have
been the prime-mover of weak wages. But they have probably been a contributor in the past and, more
significantly, are likely to continue to do so in the future if these trends, as seems likely, perpetuate.
The Case for Holding Fire
Let me now turn to monetary policy. Clearly, wages are a key factor when judging inflation pressures in the
economy and the monetary policy stance. Continuing the pattern since the crisis, recent wage growth has
been, once again, surprisingly weak. Despite unemployment falling to its lowest level, and employment
rising to its highest level, in a generation, whole-economy wage growth has failed to pick-up. Indeed, wage
growth over recent months appears, if anything, to have been falling.
At the start of the year, the Bank of England Agents' annual wage survey suggested
pay settlements would
slow from 2.7% last year to 2.2% this. At the time, there was healthy scepticism within the Bank about these
Agents' survey
findings. In the event, the may, if anything, have understated the slowdown. Annual growth
in average weekly earnings peaked at 2.8% in November 2016. It currently stands at 2.1%. Excluding
bonuses, it stands at 1.7%. Data on pay settlements suggest that weak profile may persist. Private sector
wage settlements are currently running at around 2.0%, down from 3% a year ago.
These recent trends in wages, alongside further falls in unemployment, reinforce the impression of an
exceptionally weak relationship between wages and employment, a pancake-like Phillips curve. Indeed, it is
testimony to the flatness of the Phillips curve that wage growth is at similar levels today to when
The Bank's May Inflation Report
unemployment was at its recent peak back in 2011. projections assume
wage growth picks up to around 3 3⁄4% over the next three years. Given that unemployment is projected to
be broadly flat over that period, the tight labour market will have to exert increasing upward pressure on pay
growth if this wage profile is to be realised. Alternatively, whatever other factors have been dragging on pay
growth will have to dissipate.
Of course, wages are not the only determinant of underlying inflation pressures. That is why the Bank
monitors a range of around 13 other indicators of domestically-generated inflation. Each of these has their
own imperfections, but they share the aim of filtering out temporary influences on underlying inflation.19
Chart 12 shows a summary measure of these indicators of domestically-generated inflation, based on the
common volatility across these indicators.20 Two features stand out.
First, there is clear evidence of a slow build in underlying inflation pressures in the UK economy since around
2015, as slack has been absorbed. Since then, domestically generated inflation has risen by around 0.5
percentage points.
But, second, this nominal build has been very slow, despite rapid falls in unemployment. Underlying inflation
is estimated to be around the same level it was in 2013. That leaves it around 0.7 percentage points below
19
While they will strip them out to some extent, these measures are not completely immune from external factors, such as changes in
the exchange rate or commodity prices.
20
Technically speaking, it is the first principal component of the Bank's range of
domestically-generated inflation measures.
the level consistent with hitting the inflation target.21 If it rose at similar rates to the past few years, during
which slack was being eroded sharply, underlying inflation would still take another three years or so before it
reached target-consistent levels.
As past rates of erosion in slack are unlikely to be replicated over the next three years, this suggests there
could be downside risks to hitting the inflation target, unless the Phillips curve reasserts itself or nominal
momentum in the economy picks up in the period ahead. More generally, relatively low and slow rates of
nominal build in the economy over the recent past provide one reason for caution when considering
tightening the UK's
monetary stance, if the inflation target is to be hit on a sustainable basis.
A second factor which plays in the same direction is Brexit. The Bank has already made some allowance for
the effects of Brexit on the economy in its published projections for output and inflation since the referendum.
UK's future trading arrangements are
One of those effects is that changes in the likely, over time, to drag on
trade volumes (exports and imports), activity and productivity in the economy.22 Necessarily, given there are
no previous episodes of this type, those impacts are uncertain. They are also based on a set of assumptions
about the Brexit process and its ultimate end-state, which may or may not be realised in practice.
For instance, underlying these Brexit effects is an assumption that the process is a smooth and orderly one.
This is a strong assumption. A number of market participants and external commentators believe there is a
risk Brexit may be neither smooth nor orderly. If so, that could prompt a discontinuous response by
consumers and companies. For example, if they were to begin building precautionary savings, this would
affect growth significantly and adversely. There could be a "Brexit break" in the economy.23
This discontinuity risk is difficult to dismiss. Indeed, the risk of sharp, Brexit-induced, slowdown seems to be
a key factor holding the sterling yield curve at its current low levels, according to market participants. On this
view, the sharp slowing of UK growth in the first quarter of this year could be the harbinger of things to come.
And there are already signs of a sharp slowdown in big-ticket discretionary purchases by consumers,
including houses, cars and household goods. If this persisted, it too could justify monetary policymakers
staying their hand. It would be imprudent to add fuel to any contractionary fire with an early interest rate rise.
A final factor which, at least in principle, could be used to justify a continuing accommodative monetary policy
stance is the level of the sterling yield curve. This is remarkably flat and has become flatter over the course
of this year, despite medium-term growth expectations being revised upwards. Only one rise in UK interest
21
the average of the different indicators' deviation from their estimated
Based on "inflation