BoE’s Bailey says he’s puzzled by stubborn pay growth in UK

MARRAKECH, Morocco (Reuters) – Bank of England Governor Andrew Bailey said on Saturday he was puzzled by the continued strength of pay growth in Britain which, unlike other areas of the economy, has not yet responded to the BoE’s run of 14 back-to-back interest rate hikes.

The increases in borrowing costs were having an impact on employment numbers and in the housing market, Bailey told a panel discussion on the sidelines of International Monetary Fund meetings in Morocco.

“I should say what is more puzzling and in a sense we wait to see is the situation on pay and earnings where… the usual transmission mechanism is not yet being demonstrated,” he said during the event organised by the Group of 30 consultative body.

(Reporting by Balazs Koranyi; Writing by William Schomberg)