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U.K. interest rates would have to be raised if the labor market stays tight, Bank of England Policymaker Jonathan Haskel said on Tuesday.
"Even though much of the current inflation is due to outside forces such as energy prices, but the labor market is tight and we have to be vigilant," the banker said. If the labor market stays tight, Bank Rate will have to rise, he said.
Markets widely expect the BoE to hike its rate in December as inflation remains high and the labor market continues to strengthen.
Haskel noted that the economy recovered largely from the shock caused by the pandemic.
"On current data, almost no rise in unemployment and the likely reabsorption of nearly all workers who were furloughed, who at one point accounted for almost one third of the workforce," said Haskel.
"In my view the prospective rise in Bank Rate from its emergency level - when that comes - is not a bug, but a feature," Haskel said. It reflects the success of the policies, mostly fiscal, health and science that have supported the economy over the pandemic, he added.
