Britain is experiencing its first “lost decade” of economic growth for 150 years, Mark Carney has warned.
In an extraordinary speech Monday in Liverpool, the Governor of the Bank of England called for stronger measures to confront inequality in order to stop more people turning their back on free market ideas and policies.
Mr Carney said it is understandable that the public had come to associate globalisation with low wages, insecure employment, stateless corporations and “striking inequalities”.
He said: “For free trade to benefit all requires some redistribution.”
"We need to move towards more inclusive growth where everyone has a stake in globalisation."
Many people across the advanced world are "losing trust" in a system that did not "raise all boats", he added.
His speech aimed to respond to critics of low interest rates and exceptionally loose monetary policy, which include Prime Minister Theresa May, with the defence that had the Bank of England not acted, the situation would have been worse.
Mr Carney that it was wrong to argue that savers had been unfairly hit by low rates because the Bank's monetary policies since 2009 had lifted all asset prices, from house prices to stocks and shares.
The thrifty saver and the rich asset holder are often one and the same,” he said, pointing to Office for National Statistics survey data showing that only 2 per cent of households have bank deposits worth more than £5,000 while also having no other significant financial assets and no house.
“Has monetary policy robbed savers to pay borrowers? Has the MPC [Monetary Policy Committee] been Robin Hood in reverse? In a word, no”.
The Governor acknowledged the economy was stronger than the Bank expected after the UK voted to leave the EU but he also warned that growth was increasingly led by consumption and a falling household savings rate.
Last week, Andy Haldane, the Bank of England's chief economist, struck a similar note when he warned about Britain's widening inequality gap.
Mr Haldane also defended the Bank’s much-criticised monetary stimulus programme, stressing that it has delivered economic benefits to all regions of the country, not just London
