The Federal Reserve's step closer to higher interest rates on Wednesday raises the question of when the Bank of England will move -- and there's a view, not shared by U.K. policy makers, that the U.S. has to go first.
Key to the timing for both central banks is the amount of slack remaining in their labor markets. And by some measures, that looks pretty close to being used up in Britain, maybe even more so than in the U.S.
The improvement in Britain's unemployment rate is well established, but there are other measures that warrant a closer look. For instance, the number of discouraged workers, or those who have dropped out of the labor market because they don't think there are any jobs available, has fallen back to pre-crisis levels in the U.K.
But not so much in the U.S.
Britain's labor-participation rate and inactivity rate have both improved
There isn't wholesale improvement, though. There are still plenty of people in the U.K. who'd like to work more:
And what does all this mean for policy? The BOE will vote next week and on Dec. 10, while the Fed's next policy announcement isn't until Dec. 16.
"It may be that the U.K. needs to tighten more urgently" than the Fed, said Liz Martins, an economist at HSBC in London. "But strategically, it may not move without this comfort blanket."