what is PIMCO’s view on the U.K. economy?
Mather: The U.K. economy has been very steady and you still have slightly above-trend growth. We’ve not seen the degree of upside surprise that we’ve seen in the euro zone, but U.K. growth has held up very well. We observed some seemingly contradictory phenomena in the U.K. labour market where unemployment has been edging up in the U.K., but jobs are still being created. If you look at just unemployment, you’d suspect that there is some slack in the labour market. If you look at just job growth overall, you would expect that the labour market is running out of slack. These phenomena are happening because there has been massive growth in the labour force due to net migration, which has continued to surprise us and presumably everyone in the U.K., and due to older workers staying or rejoining the labour force. Similar to the euro zone, the healthy labour market hasn’t necessarily led to much pricing power on the part of labour. With no significant inflationary consequences from the labou
