UK Business Minister Says Higher Wages A Must

The British government is right to focus on driving up wages, business minister Kwasi Kwarteng said on Sunday, expressing confidence in the ability of Bank of England (BOE) to curb rising inflation, William James reported for Reuters.

Photo Insert: Business minister Kwasi Kwarteng

BoE governor Andrew Bailey has said he is concerned about inflation running higher than the bank's target of 2.0%, describing the need to prevent rising prices from becoming permanently embedded.

During an interview with Times Radio focused on soaring energy costs and supply chain disruption caused by labor shortages, Kwarteng was asked whether the people should start preparing for an interest rate rise to tackle inflation.

"The bank is independent, and will take a view," he said. "The bank's principal motive will be to try and curb inflation, I think that they're going to do a good job of that and we have to make sure that we can contain any rises in the cost of living."

In its September policy statement, the BoE nudged up its forecast for inflation at the end of the year to over 4%, and the bank's chief economist has warned the size and duration of the jump are proving greater than expected.

But Kwarteng defended the Conservative government's plans to transform Britain into a high-wage economy, as set out by Prime Minister Boris Johnson in a speech last week.

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