Economics
U.K. Is Far From Full Employment, Former BOE Official Says
- Blanchflower says joblessness of 3% may be needed to spur pay
- Dovish view puts Blanchflower at odds with BOE officials
Photographer: Simon Dawson/Bloomberg
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U.K. unemployment might have to drop as low as 3 percent, a rate not seen in at least half a century, before wage growth picks up any serious traction, according to research co-written by a former Bank of England policy maker.
The number of people seeking more working hours has jumped since the global financial crisis, while weaker bargaining power means employees are “frightened” to ask for higher pay, wrote David Blanchflower, who was on the BOE’s interest-rate panel from 2006 to 2009, and University of Stirling economics professor David Bell.