Two hefty items in Bank Underground offer thoughts from people involved in the Bank of England, but only expressing their view of course.
On Friday 10 July, Alastair Cunningham and Glynn Jones ask the question "Does business intelligence still point to labour market slack" which suggests that out there is a continuing mismatch between the skills needed and what is available to hire.
The article concludes:
As a result, we believe that there is little – if any – slack remaining in the labour market and that the potentially inflationary impact of a tightening labour market is therefore being offset by other factors.
These might include compositional changes within the workforce, lack lustre productivity growth, softer hiring intentions, constrained margins and the impact of low CPI inflation on pay bargaining.
That matters because it suggests a risk that wage inflation will pick up more sharply if and when any of these factors ‘wash out’.
The article might answer a question in the item "Fancy A Pint" of Wednesday, 8 July which has comment on what our Higher Education system is supposed to be doing or rather not doing .
In the Bank blog on Wednesday 8 July there was an article in which Rhiannon Sowerbutts and Peter Zimmerman ask a fair question "Who benefits from the implicit subsidy to too big to fail banks"? Their analysis concludes:
The available evidence implies that most of the implicit subsidy benefits senior bank employees and shareholders.
The structure of credit markets suggests that not much of the benefit is passed on to creditors and customers.
But further empirical investigation is needed in order to come to any definite conclusions.