UK economy: the slack is in the labour market - BBH

Analysts at Brown Brothers Harriman explained, in respect of the UK economy, that the slack is in the labour market.  

Key Quotes:

"Unemployment, the Bank of England now says, can fall to 4.5%.  

Previously 5% was thought to be full employment.  

For policymakers, this means that the economy growth may not be inflationary.  

In turn, that means that the projected increase in inflation may not be so worrisome and more transitory, having to do with sterling's past slide and the recovery in oil prices.  

Later this year, large parts of the fall in sterling and the increase in oil prices will drop out of the comparisons (base effect)."