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Chart 17: Projection for wage growth and inflation, assuming a flatter Phillips curve Percentage change oya  6 4 2 0 -2 -4  Wages - February IR projections Wages - flatter Phillips curve Inflation - February IR projections Inflation - flatter Phillips curve Source: ONS and Bank calculations. 8  For instance, see Rogoff (2003, 2006), Ball (2006), Bernanke (2006), IMF (2006), Borio and Filardo (2007) and BIS (2014). 9  The independent variable is the MPC’s estimate of the hours gap. 10  See Bell and Blanchflower (2011, 2013) for a discussion of the role of underemployment in the UK economy since the crisis. BIS central bankers’ speeches  9  To give a sense of its implications, imagine the level of slack were currently around 2% and was only gradually eroded over the forecast. Chart 18 shows the resulting path of inflation and wage growth. Inflation and wage growth are both materially weaker: at the twoyear horizon, they are around 0.2 percentage points lower than in the MPC’s February Inflation Report. Each of these three explanations of the wage puzzle is empirically plausible.