17/18  Conclusion In conclusion, allow me to recall that, in a setting of limited potential growth, the only means of improving the economy’s well-being turns on raising productivity. Indeed, set against the mere accumulation of production factors, increasing productivity is the sole mechanism that can generate sustained and stable economic growth in the long run. It is therefore crucial to make the structural reforms needed to improve productivity dynamics. Among other aspects, there is ample room to undertake reforms that reduce labour market duality, limit regulations impinging on competition and the allocation of resources, and eliminate the human and technological capital shortfall. Thank you for your attention. 18/18
Whatever is negotiated, in terms of both the final arrangements and the transition to them, the most important influence on demand in the short run will be the degree of access to the single market since the UK runs a 1.5% trade surplus in services and a 5% trade deficit in goods. 45  External demand for UK exports will also reflect the extent to which UK firms can maintain their positions in EU-based global supply chains. The proportion of UK exports that are intermediate components of EU value th  rd  chains has increased from about 1/5 of exports in 1995 to about 1/3 in 2014 (Chart 13). 46  Increasingly,  44  Literally: stepping back in order to jump better. The ultimate impact of Brexit on EU demand for UK exports depends on the extent to which UK access to EU markets resembles being a member of the customs union for goods and the single market, which covers trade in goods and services as well. 46 World input-output database. See also Credit Suisse, ‘Brexiting the supply chain’, European Economics Research 11 August 2016. 45  17  All speeches are available online at www.bankofengland.co.uk/speeches  17  the UK doesn’t so much export to Europe as through Europe; it is a supplier of components to final goods that are exported beyond the continent.