British rate rise prospect cools, pound falls as wages lag

The Bank of England lowered its forecast for wages growth in Britain on Wednesday, placing a dampener on news of a further drop in unemployment. The bank edged up its growth forecast for 2015, but despite recent solid economic growth figures for Britain, there are increasing signs that wage growth will lag inflation. That in turn could cause the Bank of England to wait until next year before moving to raise record-low interest rates. However, the firm growth trend in Britain, a member of the European Union but not of the eurozone, contrasts with the eurozone climate. Speculation that the BoE would raise its key interest rate from its current 0.5-per cent level before the end of 2014 has helped to boost the pound in recent months, according to AFP.