Andrew G Haldane: Whose recovery? Speech by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, in Port Talbot, Wales, 30 June 2016. *  *  *  Accompanying charts can be found at the end of the speech. The views are those of the author and not necessarily those of the Bank of England. I would like to thank Mauricio Armellini, Christine Boykiw, Mark Carney, Ian Derrick, Chris Duffy, Jeremy Franklin, Emma Hardaker-Jones, Steve Hicks, Dena Jacobs, Arpad Morotz, Ben Nelson, Lizzie Peck, Alice Pugh, Lee Robinson, Mark Robson, Arthur Turrell and Sebastian Walsh from the Bank and Elaine Chamberlain, Alan Newman and Phil Wales from the ONS for contributions and comments. It is a great pleasure to be here in Port Talbot. I want to discuss the UK’s economic fortunes. The past few weeks have been dominated by the run-up to the EU referendum vote and its aftermath. This has generated considerable uncertainty about the economy, about policy and about politics – a heady cocktail. I will come to those uncertainties, and their implications for monetary policy, at the end. But I wanted to start by assessing the UK’s economic recovery so far, as this provides important context for what happens next. Last year I visited Nottingham on one of my regular regional visits. As with today’s, these visits are crucial for helping the Bank of England make sense of the economy. My first stop was a lunch for local business people.
This suggests these gains have come principally from rises in property and pension wealth. In other words, the gains have been skewed towards those in society who own their own home or who have sizable pension pots. That skewed wealth picture is confirmed if we look at measures of median, as opposed to mean, wealth using household-level data (Chart 10). Since 2006, average net household wealth has risen by around 25%, from £ to £ Over the same period, median household wealth has increased more modestly, by around 15%, from £ to £ Overall, then, although the aggregate data suggest a fairly robust recovery, a drill-down paints a more nuanced picture. The rising economic tide has not lifted all boats. Indeed, a sizable fraction of households have seen no recovery in their disposable incomes, a rise in job insecurity and at best modest rises in their wealth. For them, the “recovery puzzle” may not be  5  Gallie D et al (2016). 6  Gregg and Gardiner (2015)  7  Gallie, Felstead, Green and Inanc (2016)  8  Citizens Advice (2016). BIS central bankers’ speeches  5  so puzzling. These data also suggest that distributional factors may be important when understanding “whose recovery”. Let me now turn to those. Disaggregating the jigsaw There are a number of ways in which the economic jigsaw can be rearranged to provide a different picture of the UK’s economic fortunes.