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Migrants not behind slowdown, says Bank of England governor Mark Carney

By Clare Hutchison and Hazel Sheffield

Published 15/05/2015

Bank of England Governor Mark Carney
Bank of England Governor Mark Carney

Bank of England governor Mark Carney has said that migrant workers are not to blame for stalling UK productivity, which has failed to meet expectations and contributed to low growth of household incomes.

Mr Carney said there had been huge growth in employment in the UK and it is now one of the world's strongest job markets.

"There has been a big increase in British nationals wanting to work," he said.

Two factors have contributed to raising the employment rate, he said: a hike of 300,000 in the number of older workers and an increase in the number of people who want to work more hours, from 200,000 to 300,000.

He said net migration had only contributed 50,000 more workers.

In an interview with Radio 4's Today Programme, Mr Carney refused to be drawn on when interest rates would rise. He said they might go up next year, but only if inflation rises above 2%.

He chose instead to focus on productivity, or how efficient workers are, as the key factor in household income. The Bank of England would do as much as it could to improve productivity now that employment has improved, he said.

"Increasing interest rates may not be sharp and not extreme, but limited and gradual," he said.

"We have a weak global economy and ongoing fiscal consolidation that slows the pace of growth in the economy. There is also a dampening from currency."

On the issue of a referendum on the UK's membership of the EU, he said it should happen "as soon as necessary".

"There has been awareness of political uncertainty, which could be to do with the election or the referendum. But what investors are telling us is that they've not yet acted on that uncertainty. They continue to invest and continue to hire," he said.

Belfast Telegraph

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