- Wages are an important macroeconomic story
- But for millions with stagnant pay, the individual impact is huge
Over the past six months, economists have tended to look at pay through the lens of what higher wages will do to inflation.
This is understandable: the Bank of England’s Monetary Policy Committee has made no secret of the fact that future decisions will hinge on the path of labour market data. It warned as recently as December that high wage growth could be slow to unwind. One rate-setter, Ben Broadbent, even said the committee would need to see a “protracted and clearer decline” in wage inflation before policymakers could “safely conclude that things are on a firmly downward trend”.