In balance sheet terms, the younger buyers were acquiring housing assets and debt; and the older sellers were swapping free equity in houses for financial assets. In consequence, for a while, the ratio of aggregate household debt to assets remained fairly stable; and the ratio of financial and housing assets-to-income rose steadily. Taken as a whole, households were vulnerable to falls in asset prices. Households now face lower asset prices, somewhat lower house prices, tighter credit conditions, a lower path of demand and output, rather less job security, and a much greater sense of uncertainty. Younger households in particular have a strong incentive to save more (Chart 7) to repair indebted balance sheets, or to accumulate the deposits that are once again needed to buy a home (given banks’ policies on loan-to-value ratios). By contrast, taken as a whole, the corporate sector has been running a cash surplus throughout – in the run up to the crisis, and since. Some of that is no doubt down to firms having learned lessons from flirting with excessive leverage during the “telco” boom nearly a decade ago. But quite a lot of the cash surplus has resided in oil companies and, since the crisis, in financial firms, which face the task of gradually deleveraging and reliquifying.
And that’s part of what the econoME materials will teach young people. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  To really bring the Bank’s work to life and give students a chance to hold us to account, colleagues below director level from around the Bank are heading into classrooms across the country. These Bank Ambassadors will visit over 200 state schools over the next twelve months. The feedback from the first 30 visits to state schools has been terrific. Central banks are not often associated with the words “positive”, “appreciated” and “inspiring” so you can imagine how invigorated our Ambassadors are when they hear them. They’ve also been challenged with the length and quality of the questions they have had to face from some students who appear to be candidates for future Treasury Select Committee membership. Our third reason for creating an education strategy is to inspire economists of the future and thereby improve diversity in finance, business and economics. We hope to convince young people of the value of studying economics. We may be a bit biased but we know it’s a fascinating subject and one that teaches skills that can open doors to a huge range of rewarding careers. And it’s achievable. As Keynes observed “the study of economics does not seem to require any specialised gifts of an unusually high order.” Yet, economists are still a rare breed. Last year, less than 0.1% of all GCSE students and 4% of A-level students studied economics.