- Wage bargaining has surprised to the upside
- There has been a very large terms of trade shock in this country
- Many indicators are signalling a fall in inflation, which will be marked by the end of this year
- Question is: As headline inflation comes down, will we see inflation expectations continue to come down and will that impact wage bargaining?
Dhingra:
- Labour market continues to ease as MPC’s hiking cycle takes effect with a lag
- Pass-through of level changes to wages would not necessarily pose a risk to our target in the medium term
- Not yet evidence to suggest firms will seek to increase their margins
- Domestic factors are likely to continue to ease the pressure on CPI inflation
This article was written by Adam Button at www.forexlive.com. Source