Mark Carney: Policy Panel - Investment and growth in advanced economies

Remarks by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at the 2017 ECB Forum on Central Banking, Sintra, 28 June 2017.

The experience of business investment in the UK since the onset of the financial crisis broadly matches that elsewhere in the advanced world - a sharp fall followed by a feeble recovery (Chart 1).  Peak to trough, the level of UK business investment fell by 20%, and it was six years before it surpassed its pre-crisis level, putting the recent experience at the bottom of the swathe of past UK cycles (Chart 2).  

In my brief remarks today, I will offer some possible explanations for this performance before concluding with comments on the outlooks for UK investment and monetary policy.  

I.  Investment since the crisis

In part, weak investment reflects a weak economy, with the recovery following the crash being the slowest since the Great Depression.