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BoE'sAndrewHaldanewarnsofregionalgrowthinequalityBBCNews

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BoE'sAndrewHaldanewarnsofregionalgrowthinequality
2December2016 Business

BANKOFENGLAND

RegionalinequalityintheUKisbecomingmorepronounced,BankofEnglandchief
economistAndrewHaldanehaswarned.
LondonandtheSouthEastaretheonlyplacesintheUKwhereincomeperheadisbackabove
prefinancialcrisislevels,hesaid.
NetwealthhasalsofalleninplacessuchastheNorthEastofEngland.
ButwithoutactionbytheBank,theregionscouldhavefacedeconomiccontraction,headded.
"TheUK,Ithink,istowardsthebottomoftheleaguetablewithinEuropeintermsofitsdegreeof
differenceacrossregions,"MrHaldanetoldtheBBCeconomicseditorKamalAhmed.
Britain'sinequalitymapstarkandgrowing
HesaidthatwagedifferencesbetweenregionsoftheUKcoulddifferbyasmuchas50%and
thattheproductivitygapbetweenregionscouldbeasmuchas60%.
MrHaldanealsosaidtherehadnotbeenmuchevidenceofthosegapsshrinkingoverthepast
fewyears.

http://www.bbc.co.uk/news/business38186053

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BoE'sAndrewHaldanewarnsofregionalgrowthinequalityBBCNews

"Ifanythingthesegaps,whichareoflongstandinghavenudgedalittlewideroverthecourseof
theUK'srecovery,"hesaid.

Blunttools
Therewasnosinglereasonwhythereweresuchbigandpersistentdifferencesbetween
regions,hesaid.
Buthethinksdifferinglevelsofskillsandresearchanddevelopmentcouldbepartlytoblame.
"Verymuchmoreoftheresearchanddevelopmentoccurs,asyoumightexpect,inthosehigh
productivity,highincomeregionsofthecountry,"headded.
MrHaldanesaidregionalinequalitywasamongthemostimportantissuesfacingtheUK.
Reducingthegapcouldopenupconsiderableopportunities,hesaid.
Forexample,hesaidthatiftheproductivitylevelsofallcompaniescouldbebroughtuptothe
levelsofthoseinthemostproductivepartsoftheUKitwouldboostproductivity"byfully20%".
"ItwouldtaketheUKrightuptheretorivaltheGermaniesofthisworldwhenitcameto
efficiencyandperformance,"headded.
"ThatinturnIthinkwouldliftwages,itwouldliftincomesandwouldleadtoabiggerpieaswell
asmoreequallyredistributedone."
However,theBankofEnglandlacksthetoolstotackletheproblem,accordingtoMrHaldane.
"Thetoolswehaveatourdisposalare,truthbetold...fewinnumberandratherbluntinimpact.
TheytendtoworkbyliftingallboatsacrossthewholeoftheUK,"hesaid.
MrHaldanewasgivingaspeechatanironandsteelresearchcentreinRedcar,North
Yorkshire.

RelatedTopics
UKeconomy

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