The US may be seeing the “first stirrings” of a long-awaited increase in inflation as the impact of a strong jobs market works its way through the economy, according to the Federal Reserve’s second-in-command.

In a speech to a group of business economists yesterday, Stanley Fischer, the Fed’s vice-chairman, dismissed critics within the profession who have pointed to wage stagnation in the US as evidence that the traditional link between strong employment and inflation “must have been broken”.

“I don’t believe that. Rather the link has never been very strong, but it exists, and we may well at present be seeing the first stirrings of an increase in the inflation rate — something that we would like to happen,” he told the National Association of Business Economists.