LONDON -(Dow Jones)- Bank of England Monetary Policy Committee member Andrew Sentance said Monday that the U.K. is a long way away from the inflationary conditions of the 1970s, with wage settlements so far not noticeably affected by the ongoing price pickup driven by food and energy.

In an article for the Daily Mail, Sentance wrote that the MPC was "firmly committed" to bringing inflation back to its 2.0% target over a "reasonable timeframe" and that an expected slowing in economic growth and a weakening in the labor market over the next year or so should help to damp price pressures.

Consumer price inflation jumped to 3.3% in May from 3.0% in April. The acceleration in inflation to more than one percentage point above the bank's target forced the governor of the BOE to write a letter of explanation to the government, in which he tipped inflation to breach 4.0% in the coming months.

"So far, the fluctuations we have seen in price inflation have not affected pay increases noticeably," Sentance said. That comes in contrast to the 1970s when wage gains "chased inflation upwards as workers demanded higher pay increases to compensate for a higher cost of living."

Furthermore, "the inflation of that decade was very broadbased, whereas the current pick-up in inflation is driven by rising energy and food prices," Sentance said. "Now the prices of many other goods - such as clothing, footwear, hi-fi and computer equipment - are falling," he noted.

Sentance reiterated the MPC's commitment to bringing inflation back to target over the medium term.

"Though we face upward pressure from rising energy and food prices, the MPC is firmly committed to bringing inflation back to the 2% target over a reasonable time frame," he said.

He added that an expected slowing in the U.K. economy should help the bank to achieve that goal.

"Businesses and consumers are feeling the squeeze from higher fuel and food prices, while the difficulties in the banking system and a weakening housing market are adding to economic uncertainties," Sentance said.

"These factors should lead to much slower economic growth and a weaker labour market over the next year or so - helping to offset the upward pressure we are seeing on inflation from rising energy and food prices."

-By Natasha Brereton, Dow Jones Newswires; +44 20 7842 9254; natasha.brereton@ dowjones.com

    (END) Dow Jones Newswires   06-23-08 0623   Copyright (c) 2008 Dow Jones & Company, Inc.