They may also be linked to the stagnation, or in some cases falls, in disposable incomes in some regions, age groups and income cohorts. A third area of perceived deterioration concerns income. With a sizable fraction of households having seen their disposable incomes stall, especially once account is taken of housing costs, that should perhaps come as no surprise. One metric often looked at here is poverty. For example, Charts 30 and 31 look at the fraction of households whose incomes are below a fixed threshold (“absolute poverty”) and below 60% of median incomes in the UK (“relative poverty”), in both cases after housing costs. 13 It does so for three cohorts: under-16s, those aged 16–65 and the over-65s. Whether in absolute or relative terms, the story is roughly the same. Among those over-65, levels of poverty have declined steadily both prior to and following the crisis, if at a less rapid rate over the past few years. That is not true, however, of the 16–65 cohort. Their levels of poverty have tended if anything to drift upwards slightly over the past few years. In other words, poverty levels among those of working age have increased at the same time as the economy as a whole has recovered fairly robustly. This, too, puts a somewhat different gloss on whose recovery this has been. Monetary policy implications What, then, does this mean for monetary policy? Around a year ago, my assessment of the UK economy was a cautious one.

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