UK Business Secretary defends position on wages, says BoE can handle inflation

LONDON, Oct. 10 (Reuters) – The British government is right to focus on raising wages, Foreign Secretary Kwasi Kwarteng said on Sunday, expressing confidence in the Bank of England’s ability to curb rising wages. inflation.

BoE Governor Andrew Bailey has expressed concern that inflation is exceeding the bank’s target of 2.0%, describing the need to prevent price hikes from taking hold. permed. Read more

In an interview with Times Radio that focused on soaring energy costs and supply chain disruptions caused by labor shortages, Kwarteng was asked if people should start shifting. prepare for higher interest rates to fight inflation.

“The bank is independent and will take an opinion,” he said. “The main motivation for the bank will be to try to curb inflation, I think it’s going to do a good job and we need to make sure we can contain any increase in the cost of living.”

In its September policy statement, the BoE raised its forecast for inflation at the end of the year to over 4%, and the bank’s chief economist warned that the size and duration of the jump turn out to be larger than expected. Read more

But Kwarteng has defended the Conservative government’s plans to turn Britain into a high-wage economy, as Prime Minister Boris Johnson outlined in a speech last week. Read more

Johnson’s new business model includes the argument that the best response to labor shortages in industries such as transportation is for companies to raise wages rather than allow more immigration.

“I think rising costs should always bother a sales department. But I also think… we need to focus on higher wages,” Kwarteng said.

Reporting by William James Editing by Frances Kerry

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