80
Bank of England chief economist Huw Pill said the UK could experience a “positive demand shock” as record-low unemployment gives workers more resources to consume.
While this could help prop up weak UK growth, on the other hand it could cloud the picture on inflation, which is still over five times higher than the central bank’s 2% target.
Pill said inflation is likely to fall sharply this year despite a “significant upside surprise” that emerged last month. But the data “serve as a reminder that the actual path of inflation could be bumpier than we expect.”