A related problem, noted above, is how to measure slack, the key input into this relationship.
In addition, other measures of slack in the labour market, such as involuntary part-time working, remain high.
Not only has unemployment fallen, but other wider measures of slack have improved as well.
So by this more encompassing measure of slack, we're a ways from full employment.
First, Britain must close the output gap (a measure of slack in the economy).
The output gap a measure of slack in the economy was about 3% of GDP, reckons the Office for Budget Responsibility, Britain's fiscal watchdog.
I mean, given that price pressures are one measure of slack, this is axiomatic (wage growth, too, is tamer than you might expect).
Hyun Song Shin, the BIS's head of research, said: "There is an implicit assumption that inflation at 2% is the best measure of slack in the economy, and that the economy gets sucked into a downward spiral when inflation hits zero.
Measuring the slack in the labour market is the Bank's way of assessing the size of the output gap, but King and Ward say it is drawing a "precision-engineered conclusion... from a very flaky concept".
The rate of capacity utilisation, a measure of slack in the economy, eased to 77.2%.In this section Overview Output, demand and jobs Prices and wages Part-time workers Money and interest rates The Economist commodity price index Stockmarkets Trade, exchange rates and budgets Commercial-property prices ReprintsIn Canada, consumer prices rose by 2.5% in the year to June above the 2.0% target.
