BoE looking at wage growth, is it high enough? - ING

Analysts at ING explained that the other way of looking at underlying inflation is to monitor wage growth, and this is something Bank of England officials have made clear will be pivotal in any rate hike decisions. 

Key Quotes:

"And with the unemployment at the lowest level since 1975, policymakers are looking for a sharp pick-up this year.

There are signs that skills shortages in certain sectors are prompting employers to boost salaries in a bid to retain staff. Bank agents have noted early signs that this year's wage-setting round (to the extent there still is one in the UK these days) is looking more positive.

On the flip side, with the economy still struggling to get up to speed and raw material costs rising, some firms may continue to take a more conservative approach to wage-setting with an eye on maintaining margins. It's this latter reason that leads us to think wage growth may not pick-up quite to the extent the Bank has been pencilling in."