In addition, regulatory regimes that promote competition foster innovation and diffusion of technologies. According to an OECD study, the United States has policies that are effective in preventing anti-competitive behavior, but Germany is not far behind. Why does a more competitive environment foster innovation?
This means that the upward pressure on wages growth over the next couple of years is likely to be only quite modest, and less than we were earlier expecting. Caps on wages growth in public sectors right across the country are another factor contributing to the subdued wage outcomes.