Chart 11: Private sector job-to-job flows have picked up, having moved closely with wages in the past, but less closely recently…  Chart 12: The REC survey measure of pay for new recruits has picked up sharply, but its relationship with official data on average pay has become less robust. Source: ONS, Labour Force Survey and Bank calculations. (a) The number of people who report being in a private sector job in the first quarter, and then report being in a private sector job for less than three months in the second quarter of the survey. Source: ONS, KPMG/REC/Markit and Bank calculations. (a) Left-hand scale, lagged three months. The REC measure is produced by weighting together survey indices for the pay of permanent and temporary placements using shares in employment. (b) Right-hand scale. Private sector regular pay growth versus single month a year earlier.
By 1914, while the U.S. was already the world’s largest economy and trading nation, its banking system remained curiously parochial and the dollar was not a major international currency. 8 In fact, American firms continued to finance their trade almost entirely with credits from foreign banks, a source of resentment, with Paul Warburg, the first Federal Reserve vice chairman, referring to the annual acceptance fees paid to London banks as a form of “tribute.”9 With the passage of the Federal Reserve Act in 1913, some of the constraints on the emergence of a robust dollar trade financing market were removed and the newly established U.S. central bank could take a more active role in nurturing and backstopping a nascent dollar acceptance market, which it did. These efforts included buying dollar acceptances for foreign central bank accounts at competitive discount rates and providing guarantees, for a small fee, on payments at maturity of acceptances bought for these accounts.10 These actions helped to spur the dollar’s emergence as an important international currency, with dollar acceptances viewed as an attractive reserve asset by the 1920s. The early accounts also represented tangible links of cooperation among major central banks, with much of this cooperation centered on efforts to maintain or restore the international gold standard in the aftermath of the First World War. 11 The reciprocal relationships enabled central banks to buy and sell foreign exchange to influence credit conditions in each other’s markets with the aim of regulating cross-border gold movements.