Chart 3: Credit growth coming back into line with GDP growth in the latest data Credit growth relative to GDP growth Credit growth relative to GDP growth (3-year trailling average)  15 10  1969 1971 1973 1974 1976 1977 1979 1981 1982 1984 1985 1987 1988 1990 1992 1993 1995 1996 1998 2000 2001 2003 2004 2006 2007 2009 2011 2012 2014  0 -5  Percentage points  5  -10 -15 -20 Source: Bank of England. BIS central bankers’ speeches  3  That said, increased vigilance is merited given the softness in nominal GDP growth, the stillelevated levels of household debt relative to income, the large current account deficit and pockets of more buoyant activity in areas such as Buy-to-Let mortgages, unsecured consumer credit and commercial real estate. More fundamentally, it doesn’t take a genius to recognise that a prolonged period of low and relatively predictable interest rates could encourage the build-up of excessive risks. That’s why the Bank is monitoring risks closely and has taken action where appropriate.
10  BIS central bankers’ speeches  15  Chart 9: Unemployment on a solid downward trend, and short-term unemployment now below pre-crisis average 5 6 months or less between 6 and 12 months over 12 months  4.5 4  3 2.5 2  Per cent  3.5  1.5 1 0.5 2015  2014  2013  2012  2011  2010  2009  2008  2007  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1996  1996  1995  1994  1993  1992  0  Notes: Dotted lines show averages computed over 2000–5. Source: ONS and Bank calculations. In the wake of the crisis, one reason that headline unemployment has not been a sufficient summary statistic for slack in the labour market is because of underemployment of those in work. Employees wanted to work more – perhaps to make up for lost income. This gap between actual and desired hours widened significantly (Chart 10). Since the start of 2013, it has been closing and most recently, rather sharply so. As overall employment growth remains strong (Chart 11), this may reflect a normalisation of working patterns, with desired average hours returning to their pre-crisis level, rather than an unwelcome decline in labour demand. An additional source of labour supply is net migration, which has recently been running above past averages.