Ben Broadbent, the Deputy Governor of the Bank of England (BoE), made some statements regarding a potential slowdown in the UK’s economy, as noted by The Telegraph.
“Ben Broadbent compared the current slowdown in growth and wages to a lull at the end of the 19th century, when the height of the steam era was over but the age of electricity was yet to begin.
Today’s economy could be experiencing a similar trough as it passes the boom of the digital era and awaits the next big breakthrough, possibly with artificial intelligence.
In an interview with the Telegraph, Mr Broadbent, who sits on the committee that sets interest rates, said financial experts used the “menopausal” metaphor for economies that were “past their peak and no longer so potent”.
Mr Broadbent said opinion was divided over the cause of Britain’s current productivity slowdown, which has lasted for nearly a decade and resulted in poor growth and stagnant wages. The knock-on effect for governments is that the tax take also grows slowly, meaning less money for public spending.
Over the past decade, however, productivity levels have been weaker than expected, forcing the Government's spending watchdog, the Office for Budget Responsibility (OBR) to slash its predictions for economic growth last year.
The OBR said low productivity growth would add £90bn to Government borrowing by 2021-22 by denting tax receipts."
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