The UK prices pressures could mount in coming months and any sustained increase in wages could become problematic for the country’s price outlook, Grant Fitzner, Chief Economist at the Office for National Statistics told MNI in an interview.
Key quotes
"We're seeing a period of pent-up demand and a shortage of supply, and we don't know how long that will last.”
"On goods, there's a limit to how many sofas and TV's we can buy. We don't know as much about services, but there are natural limits to these things. I would expect [consumption] patterns to return to normal."
"We're not saying that it's all transitory.”
“There is some evidence that supply constraints could last," making special mention of the global semi-conductor shortage. But public expectations of inflation remain subdued.
"We're not seeing any significant pick-up in expectations.”
"We're not seeing any red lights flashing yet."
"The underlying pace of wage growth is" approximately 3%, a level he considers to be "not inflationary."
Wage growth could become problematic "if you start to see high settlements, but we're not seeing that at the moment.”
Market reaction
GBP/USD is keeping its range near daily lows of 1.3868, as it loses 0.18% on the day.
