BoE in no hurry to raise rates amid weak wage growth

The Bank of England has forecast that UK wages will grow far more slowly than previously expected and linked their rate of increase closely to borrowing costs, suggesting it is in no hurry to raise Britain’s record low interest rates.

Shortly after data showed average British wages suffered their first fall in more than five years in the second quarter of 2014, the bank cut its forecast for wage growth this year in half to 1.25%.

Sterling fell sharply to a 10-week low against the US dollar and British government bond prices pared losses after the announcement by the bank, which caused markets to reduce bets on the possibility of a first rate hike before the end of 2014.