"Andrew Haldane, the outgoing Chief Economist of the Bank of England is incredibly bullish about the UK economy in light of the volume of stimulus that has been provided during the time of the Pandemic.
However, he has also raised the spectre of a long-forgotten bogey man of the bad old days of wage inflation.
Given the rate at which the economy is recovering and the continued pent-up demand that is still to be satisfied, Haldane is concerned that trades Unions will begin to believe they can anticipate higher inflation by pre-empting a fall in workers real wages by demanding increases well above the current rate of inflation.
This would create a wage/price cycle not seen since the seventies.
There is already something of a skills shortage developing as the economy reopens and such militancy could see the UK’s recovery derailed.
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