* 1998 prices  BIS central bankers’ speeches  Chart 9 – Wealth by type  Chart 10 – Mean versus median wealth* £ bn  Wealth, £  120  500,000  100  400,000  800  300,000  600 400  2008  2010  2012  2014  200,000  200  Median net wealth inc. pensions  0  Mean net wealth inc. pensions  100,000  0 Private Pension Wealth 2012 2014 2008 2010 Physical Wealth* Sources: Wealth and Asset Survey, ONS, Bank calculations. Financial Wealth (net) * Property, physical and financial wealth excluding private pensions. Property Wealth (net) Total Wealth (including Private Pension Wealth  Sources: Wealth and Asset Survey, ONS, Bank calculations. *July 2006 to June 2008 estimates for physical wealth are based on half sample. Chart 11 – Regional GDP per head* North East Yorkshire and The Humber West Midlands London South West Scotland  North West East Midlands East of England South East Wales Northern Ireland  2007 = 100  110 105 100 95 90  2007  2008  2009  2010  2011  2012  2013  2014*  85 2015**  Sources: ONS, Bank calculations. * Regional GVA (income approach) deflated using the GDP deflator. 2014 is provisional ONS estimate. 2015 figure is indicative, estimated using the average annual growth rate from the preceding two years.
Given my outlook and risk assessment, I judge that a cautious and gradual approach to policy normalization is appropriate. Moreover, caution is also called for because of our limited ability to reduce the policy rate to respond to adverse developments, recognizing that we could also use forward guidance and balance sheet policies to provide additional accommodation if that proved warranted. Of course, the trajectory of short-term interest rates and the timing of future monetary policy adjustments will continue to be informed by the incoming data – both economic and financial – and how that data influences the outlook. The problem of long-term unemployment Before turning to the outlook for the local economy, I would like to spend a few minutes talking about the problem of long-term unemployment. The Great Recession was very severe, resulting in a large decline in output and damage to the labor market. From peak to trough, non-farm payroll employment declined by 8.7 million. The unemployment rate peaked at 10 percent. At the same time, the average duration of unemployment increased significantly. The number of individuals classified as long-term unemployed – that is, those who were unemployed for at least 27 weeks – peaked in December 2010 at 6.4 million, an increase of 5.3 million from the cyclical low in May 2007. Long-term unemployment as a fraction of total unemployment increased from 16.7 percent to 44.8 percent. The hardships of prolonged unemployment touched many families around the country and this is tragic.