21  All speeches are available online at www.bankofengland.co.uk/speeches  21  Annex Chart 1: Google searches for “QE” and “Inequality”  Chart 2: 2007 distribution of income Average income per household £  Index, peak search rate = 100  80000  120  70000  100  2007 60000  80 50000 60  40000  40  30000  20  20000 10000  0 2004  2006  2008  2010  2012  QE  2014  2016  2018  0 1  6 7 8 Income decile Sources: ONS and Bank calculations  Inequality  Sources: Google Trends and Bank calculations  Chart 3: 2006-08 distribution of net wealth  2  3  4  5  9  10  Chart 4: 2012-14 distribution of net wealth by age  Average net wealth per household £  Average net wealth per household £ thousands) 1600000 1400000  2006-08 1200000 1000000  900  Gross financial wealth Gross property wealth Mortgage debt Pension wealth Physical wealth Unsecured debt Total  800 700 600 500 400  800000  300 600000  200 100  400000  0 200000  -100 -200  0 1  2  3  4  5  6  7  Net wealth decile Sources: ONS and Bank calculations  8  9  10  25-29  35-39  45-49 55-59 65-69 Head of household age group Sources: ONS and Bank calculations  75-79  22  All speeches are available online at www.bankofengland.co.uk/speeches  22  Chart 5: 2007 and 2013 distributions of income Average income per household £ 2013 prices)  Chart 6: 2006-08 and 2012-14 distributions of net wealth Average net wealth per household £ 2013 prices)  90000 2007  2500000 2006-08  80000  2013  2012-14  2000000  70000 60000  1500000  50000 1000000 40000 30000  500000  20000 0 10000 0 1  2  3  4  5 6 7 Income decile  8  9  -500000  10  1  2  3  4 5 6 7 Net wealth decile  8  9  10  Sources: ONS and Bank calculations  Sources: ONS and Bank calculations  Chart 7: Impact of tighter monetary policy on GDP (counterfactual)  Chart 8: Impact of tighter monetary policy on unemployment (counterfactual)  Index, 2007 = 100  Per cent 110  Data  14  Scenario without policy loosening  Scenario without policy loosening  12  Data  105  10 100 8 95  6  90  4 2  85  0 80 2006  2008  2010  Sources: ONS and Bank calculations  2012  2006  2008  2010  2012  2014  2014 Sources: ONS and Bank calculations  23  All speeches are available online at www.bankofengland.co.uk/speeches  23  Chart 9: Impact of tighter monetary policy on annual CPI inflation (counterfactual)  Chart 10: Impact of monetary policy on income, across the income distribution £  Per cent  Impact as of 2012-14 £ 2013 prices)  6  Scenario without policy loosening  30000  Data  4  Interest receipts/payments  25000  Macro effects on labour incomes  20000  Total  2  15000 10000  0  5000 -2  -4 2006  2008  2010  2012  2014  0 -5000 1  2  3  4  5  6  7  8  9  10 All  Income decile in 2012-14 Sources: ONS and Bank calculations  Sources: ONS and Bank calculations Note: Chart shows average cumulative real impact of policy changes since 2007 as of 2012-14 in pounds, using 2013 prices.

Also as with income, the net effect of monetary policy on measures of wealth inequality is negligible. The unequal prior distribution means, however, that monetary gains are heavily skewed, with the top two deciles accounting for 60% of total net wealth gains. Charts 14-17 look at the effect of monetary policy on income and wealth looking across the age distribution. They show some notable generational differences. In percentage terms, the income gains from looser monetary policy have been largest among the young, largely due to improved employment prospects. 28  Recessions typically generate sharper rises in unemployment among those who are less educated or less skilled, so it is also worth noting that the loosening in monetary policy during the crisis played an important role in limiting that effect. Older cohorts, by contrast, lost out in income terms due to lower interest receipts on their savings. By contrast, wealth gains have been evenly spread across the age distribution in percentage terms, with every cohort gaining. In money terms, the largest beneficiaries have been older age groups, the value of whose pensions and houses have been boosted by the policy-induced rise in asset prices. Looking at the oldest age group, this boost to wealth has exceeded their income losses by a factor of around 10. Looking at the effects of monetary policy by region, the benefits of monetary policy on incomes have been evenly spread in percentage terms (Charts 18 and 19). Monetary policy has not caused any significant widening in regional inequality.