BoE's Besley on inflation and the service sector

In the speech 'Inflation and the service sector' given on 18 January Timothy Besley of the Bank of England said he expects limited spare capacity in the services sector to drive up wages in the wider economy.

"Shortages of skilled labour in these sectors may lead to upward pressure on wages for such workers," he said in the speech.

Rising wages are then likely to spread to affect "all firms in the economy," he said.

Besley also said BoE's decision to hike rates earlier this month to 5.25 pct was

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