FXStreet (Mumbai) - Bank of England (BOE) Deputy Governor Ben Broadbent argued that steady economic recovery, both in the UK and wider Europe, should continue to allow for higher-skill jobs creation in the UK, and consequently push wages upward.
Broadbent delivered a speech on the UK labor market at a conference organized by the BOE on late Wednesday.
Key Quotes:
"In the past two to three years in particular, the extent of the skew towards low skilled employment helps to explain some of the weakness of average productivity and pay."
"That skew might reflect the particular circumstances of today’s recovery. Perhaps easier immigration has made low-skilled labour easier to come by, especially at a time when other European economies haven’t been growing as quickly as the UK … Maybe deterrents to investment in physical capital, and new technologies, have also reduced the relative demand for high-skilled labour."
"If so, then you might expect the compositional effects to improve further over time: a strengthening of the recovery in the rest of Europe would reduce the relative supply of low-skilled labour and a fall in risk premia on new investment, in human as well as physical capital, would raise the demand for high skills."
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