We just got another big sign that a Bank of England rate hike is still a while away
Minouche Shafik - the Bank of England's deputy governor for markets - said: "I judge it prudent to tread carefully, and refrain from voting for an increase in Bank Rate until I am convinced that wage growth will be sustained at a level consistent with inflation returning to target."
She was speaking at the Institute of Directors on Monday afternoon,
Data released in November by the ONS showed that real wages grew by 1.9% in the year to April, the end of a long running stagnation of growth dating back to the aftermath of the financial crisis.
Since then the pace of growth has slowed, and in the three months to September, wages excluding bonuses were up 2.5%, a fall from 2.8% in the same period last year. This flattening of wage growth appears to have poured water on the flames of any potential rate hike, at least from Shafik's perspective.
The Bank of England's base interest rate has stayed at a record low 0.5% since 2009, but it is expected that rates will rise in the near future, although the Monetary Policy Committee is yet to signal a firm timeframe for increasing rates.
Shafik has a reputation for being one of the most dovish members of the Bank's Monetary Policy Committee - meaning she prefers lower rates - and her latest comments certainly back up that reputation, especially when you consider that her speech was titled "Treading carefully."
While she remains very dovish, Shafik did give some signal of when she feels that a rate rise will be appropriate, saying that "once wage growth has returned to a level consistent with inflation returning to target I would expect the economy to warrant a path for Bank Rate that increases more quickly than implied by the market yield curve used to condition the November Inflation Report."
Last week the MPC voted to hold interest rates at 0.5% for another month, extending the spell of record low rates that has lasted since March 2009. Members voted 8-1 against increasing the Bank's basic interest by 0.25%.