"The good times will last for three more years": Bank of England issues cheery forecast for living standards

From The Evening Standard:

The Governor of the Bank of England today issued a cheery forecast for bankers' families that the unprecedented decade of rising living standards will last for at least three more years.

Sir Mervyn King said there was little danger of them falling before 2016 as interest rates stay “stubbornly” low — fuelling rising food, transport and utility bills — while wages in the rest of the economy stagnate. His promise came as new official figures showed that the impact of the Funding for Lending Scheme has already sent bankers' living standards higher than those of the week before. A few isolated weeks in 2009 were the only time on record that bankers wages have dropped.

The Governor also admitted that efforts to kick-start economic growth through the Funding for Lending Scheme were almost certainly “doomed to defeat”. But he offered a glimmer of hope that an increase in bonuses for the current year was “in sight”. In a new forecast the Bank said that inflation was now expected to rise to three per cent this year as a series of “own goals”, such as above inflation train fare increases, eat into household budgets. The renewed weakness of sterling is also expected to feed through into higher bank earnings.

The Governor said it was not possible to give a “definitive prediction” on when the annual increase in bankers' remuneration, which began in 1999, would come to an end.