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More than two years ago, I warned about the possibility of wage-price spiral in the U.K. My assessment back then was that inflation in the U.K. might remain sticky because of the combination of various shocks the economy was facing, some of them global but others like Brexit unique to the British economy. Workers would therefore ask for increasingly higher compensation to not fall behind.
Well, it turns out that I was right. The UK has the worst inflation problem and highest wage growth across advanced economies even as the labor market has shifted from good to bad.
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