Minimum Wage Hike May Keep Inflation High, Say Economists

According to economists, a nearly 10 % increase in the minimum wage could prolong the time it will take for the Bank of England ( BoE ) to lower interest rates and stop the inflationary decline that is anticipated.
The concern is that the increase this year will cause stickier income growth and inflation, according to economist Ashley Webb of Capital Economics on Monday.
The BoE’s Monetary Policy Committee ( MPC ), which is in charge of formulating monetary policy, also stated that it wants to see wage growth slowing before cutting interest rates from 5.25 percent.
The MPC properly decide it’s ideal to use additional precaution when bringing charges over, according to Chief Economic Adviser Martin Beck of the EY Item Club, an economic modeling organization, in light of complaints that politicians were behind the curve in tightening policy at a time when inflation was on the rise.

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