Britain’s economic outlook may have been skewed by bad data – and it could be costing billions. Wage data pored over by the Bank of England’s Monetary Policy Committee (MPC) is set to be revised in the coming weeks – and the implications could be serious.
The nine economists who decide the country’s interest rates – currently at 4.5 per cent – have consistently said they want to see pay rises slow before they can be sure that the inflationary shock brought about by Covid has worked its way out of the system fully. But wage growth remains strong.
Private sector wages have gone from below 5 per cent in early autumn last year to over 6 per cent in the latest release – meaning inflation-busting pay rises. But that pay strength is only true if the Office for National Statistics (ONS) data is correct. Now, the consultancy Oxford Economics has pointed out that data from other surveys shows that pay growth may have been slowing for the past year – and that the ONS wage data may be wrong.
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