The mainstay of our economic growth, the other 77%, came from growth in productivity. Since 2013 only 9% of our annual economic growth has come from productivity improvement. The remaining 91% has come from the increase in the total hours worked As a result, employment in the UK is now around its highest rate since comparable records began in 1971. Over 73% of people aged 16–64 are working. There are now over 31 million people in work in the UK. 1  2  See Jones C I (2015) ‘The Facts of Economic Growth’, NBER Working Paper No.21142. BIS central bankers’ speeches  Unemployment has fallen at among its fastest rate for 40 years and is now very close to its pre-crisis level – over the past two years over 1 million jobs have been created. The benefits of this are clear. Perhaps only a proponent of the ‘dismal science’, only an economist would find something here to worry about. But the fact is that we can only go so far down this route. Since 2013, the economy’s output has grown by some 5%. But though we have increased by 5% the amount we have produced, we have increased even more the hours worked to produce it. And as a result the simple arithmetic means our productivity growth has been broadly flat. And the low of productivity that has resulted is one of the main reasons why pay growth has remained so low.
I do think that the severity with which the crisis hit the European Union and the scramble for solutions that followed do not indicate that the European Union is an intrinsically flawed project, but rather an incomplete one. In other words, going only halfway does not pay off. Thank you for your attention. 6  BIS central bankers’ speeches