By Philip Uglow
LONDON (MktNews) - Monetary Policy Committee member Stephen Nickell said Tuesday that he is keeping a close watch on earnings, as pay in the private sector, excluding bonus payments, seems to be quite buoyant at the moment.
In an exclusive interview with Market News International, Nickell said, "Earnings in the private sector, regular pay, have been growing quite steadily since the middle of the year and so they seem to be quite buoyant. So I'll be interested to see what the next outcome is, because that's obviously something we watch," Nickell said. The headline rate of average earnings growth rose to 4.4% in December and the year-on-year rate of private sector earnings excluding bonuses rose to 4.9%, from 4.8% in November. The January earnings data are scheduled to be released at 09:30 GMT on March 14.
Nickell said that he tends to watch earnings in the private sector excluding bonuses as he believes that's the real driving force in the overall earnings data.
On settlements, Nickell said they seemed to be rather subdued in January. "Although settlements have gone up since last January, I think that's partly because RPI was so low at that time. But now RPI has sort of peaked out and will be coming down rapidly. I was quite gratified to to see that the January settlements, and quite a lot of people settle in January, so far seem to be relatively modest," Nickell said. He concluded that it all adds up to a situation where things are "bubbling away", but are not getting out of control. "The labour market is tight, but doesn't seem to be getting much tighter," Nickell added.