BoE's Forbes expects Britain's fourth quarter productivity will be abysmal

Bank of England official Kristin Forbes on Tuesday said she expects Britain’s fourth quarter productivity data will be “abysmal”.

Speaking at a meeting of the Henry Jackson Society think tank at Britain's parliament, she said: "It looks like fourth-quarter productivity growth is going to be abysmal. That's part of the trade-off of strong employment growth with moderate overall GDP growth.”

Forbes said she would be taking productivity into consideration in deciding when to vote for an interest rate hike, although she stressed that underlying trends were more important than a single data report.

The policymaker has said she believed there was little spare capacity in Britain's labour market, according to a speech to the society released on Monday. However, she said the recent decline in oil prices gave the BoE a bigger window to check that wages were increasing enough for a rate hike.