This means that it is very unlikely that Bank rate will return to the levels seen immediately before the crisis in the near future. See Haldane (2015) and Broadbent (2016) for further details. 17 These simulations take no account of regional variations in the monetary policy transmission mechanism. They assume that Bank rate would have stayed constant, and there would have been no quantitative easing programme. This stylised simulation is estimated at the aggregate level, and applied uniformly across the UK. All regions are affected by the same percentage change in each variable. Net wealth is assumed to move in line with nominal GDP, and no distinction is made between the various different types of wealth (such as housing or financial wealth). It also assumes that the monetary regime does not change and agents do not alter their view of the MPC’s reaction function, despite observing extremely large economic shocks. 9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9  Without the support of looser monetary policy, all regions would then have experienced a contraction in real GDP per head since 2008. Every part of the UK would have been a Red Car region. This contraction would have been large, averaging 7%, equivalent to an annual average income loss of £ per person. Here in the North-East, the loss in annual income for the average household would have been similar in magnitude. The picture is similar if we turn to unemployment.

22  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  22  References Aghion, P and Howitt, P (1998), ’Endogenous growth theory’, MIT Press Andrews, D, Criscuolo, C and Gal, P (2015), ‘Frontier Firms, Technology Diffusion and Public Policy’, OECD Productivity Working Paper, available at: http://www.oecd-ilibrary.org/economics/frontier-firms-technology-diffusion-and-public-policy_5jrql2q2jj7b-en Barnett, A, Batten, S, Chiu, A, Franklin, J and Sebastia-Barriel, M ‘The UK productivity puzzle’, Bank of England Quarterly Bulletin 2014Q2, available at: http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q201.pdf Broadbent, B (2016), ‘The distributional implications of low structural interest rates and some remarks about monetary policy trade-offs’, Speech given at the Society of Business Economists Annual Conference, available at: http://www.bankofengland.co.uk/publications/Pages/speeches/2016/940.aspx CBI (2016), ‘Unlocking regional growth: Understanding the drivers of productivity across the UK's regions and nations’, available at: http://www.cbi.org.uk/insight-and-analysis/unlocking-regional-growth/ Clark, G (2016), ‘The importance of Industrial Strategy’, Speech given at the Institute of Directors annual conference 2016, available at: https://www.gov.uk/government/speeches/the-importance-of-industrial-strategy Draghi, M (2016), ‘Stability, equity and monetary policy, Speech given at the German Institute for Economic Research (DIW), available at: https://www.ecb.europa.eu/press/key/date/2016/html/sp161025.en.html Eurostat (2016), ‘Regional Yearbook 2016’, available here: http://ec.europa.eu/eurostat/web/regions/overview Haldane, A (2015), ‘Growing fast and slow’, Speech given at the University of East Anglia, available at: http://www.bankofengland.co.uk/publications/Pages/speeches/2015/797.aspx Haldane, A (2016), ‘Whose recovery?’, Speech given Port Talbot, Wales, available at: http://www.bankofengland.co.uk/publications/Pages/speeches/2016/916.aspx Hills, S, Thomas, R and Dimsdale, N (2016), ‘Three Centuries of Data - Version 23’, available here: http://wwwbankofenglandcouk/research/Pages/onebank/threecenturiesaspx HMT (2016), ‘Autumn statement 2016’, available at: https://www.gov.uk/government/topical-events/autumn-statement-2016 House of Commons (2016), ‘Industrial Strategy’, House of Commons Briefing Paper, available at: http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7682#fullreport IMF (2015), ‘The New Normal: A Sector-Level Perspective on Productivity Trends in Advanced Economies’, available at: https://www.imf.org/external/pubs/ft/sdn/2015/sdn1503.pdf Institute for Public Policy Research (2016), ‘An industrial strategy that works for the UK: Framework and principles’, available at: http://www.ippr.org/publications/an-industrial-strategy-that-works-for-the-uk-framework-and-principles Krugman, P (1994), ‘The Age of Diminishing Expectations’, MIT Press May, T (2016), ‘CBI annual conference 2016: Prime Minister's speech’, available at: https://www.gov.uk/government/speeches/cbi-annual-conference-2016-prime-ministers-speech  23  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  23  Mayfield, C (2016), ‘How good is your business really?