BoE's Taylor says scale of second-round inflation effects unclear until 2027
LONDON, June 23 (Reuters) - Bank of England policymaker Alan Taylor said he saw less risk of second-round inflation effects from rising energy prices caused by the Iran war than from Russia's full-scale invasion of Ukraine in 2022, due to the timing of annual wage deals.
"Second round effects, what have we seen? Not much yet. I think that's partly an accident of timing when the shock hit. Most of the wage settlements for this year were done in March, April, before the shock, compared to 2022 when it hit a bit earlier in the year," Taylor said during a question and answer session at an event hosted by Barclays and the CEPR think tank.
"So I think with those wage settlements in place, probably we're not going to see a big pass-through into wage figures until next year," he added.
Taylor said he thought the likely situation was closer to that in 2011, when there was little pass-through to wages from rising inflation due to a weak labour market after the global financial crisis, than that in 2022.
