Weak productivity may keep domestic inflation sticky

If the UK's recent dismal productivity performance continues, the Bank of England may need to wait for wage growth to fall further before it feels comfortable cutting interest rates. With the latest indicators pointing to wage growth slipping to 3% later this year, an interest rate cut in June is still a reasonable assumption. But stalling productivity would be one reason the first cut comes later.

Note: We’ll be discussing the outlook for Fed, ECB and Bank of England policy in a 20-minute online briefing at 3pm GMT on Thursday 21st March. (Register here.)