Andrew Haldane: Pay power

Speech by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, at the Acas "Future of Work" Conference, London, 10 October 2018.

Central bank speech  | 
11 October 2018

It is great pleasure to be here at the Acas Annual Conference whose theme this year is the "Future of Work". It is a particular pleasure to have Brendan Barber as Chair. As a member of the Bank of England's Court between 2003 and 2012, Brendan's insights on the labour market and wider economy were crucial in helping the Bank steer a policy course through a period of first macroeconomic calm and then extra-ordinary macroeconomic storm following the global financial crisis.

It is the labour market that I want to discuss today. We have seen an unusual pattern emerge here over recent years. Jobs growth has been strong, with over 2 million new jobs created since the end of 2012. But pay growth has remained weak by historic standards, averaging around 2% annually. This pattern has been replicated across a number of other advanced economies. As we reach the anniversary of what has become a "lost decade" for inflation-adjusted pay in the UK, it is a good time to take stock.