Mark Carney to discuss wages in speech at Trades Union Congress
Mark Carney will discuss his plans for real wages in an address to the Trades Union Congress (TUC) later today.
The prospect of an interest rate rise continues to shadow the governor, and members of the TUC are expected to tell Carney to reject a hike until real wages show signs of strengthening.
The Canadian is expected to address the state of the labour market and what the future holds for monetary policy.
Despite strong GDP growth and positive medium-term trends in the property market, wages have remained below inflation, and actually fell 0.2 per cent in the 12 months to June.
"Britain needs a pay rise"
The conference slogan leaves little to the imagination – this is all about real wages. Last month the Bank changed its forecast for average wage growth to 1.25 per cent, below inflation, which is currently 1.6 per cent.
The TUC is backing calls for a minimum hourly wage of £10, something Carney is powerless to affect. Next month the national minimum wage will rise to £6.50 for those aged over 21.
Carney's speech is expected to be markedly different to that of his predecessor, Mervyn King. When King addressed the congress in 2010 it was to extol "credible" deficit reduction. Several audience members promptly left.
The governor's doveish approach to quantitative easing is likely to stir a more positive reaction, but his attitude to real wage growth is the centre piece.