to shocks, while avoiding the distortionary effects of volatile inflation. chart 12 : rise in unemployment among the young much larger than for older age cohorts … 16 - 24 35 - 44 55 - 64 25 - 34 45 - 54 65 + pp increase since 2006 chart 13 : … and incomes of the young fell most sharply during the recession. 16 - 24 35 - 44 55 - 64 25 - 34 45 - 54 65 + % change since 2006 - 5 - 10 - 1 - 15 - 2 source : labour force survey and bank calculations. - 20 2006 2007 2008 2009 2010 2011 2012 2013 2014 source : family resources survey and bank calculations. income deflated by the consumption deflator. experience shows that when the economy enters recession, the poorest are hit the hardest. during recessions the lower - skilled, lower paid people tend to lose their jobs first. xxiv all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx and recessions disproportionately affect the young ( chart 12 ). xxv graduating in a recession is generally bad news for someone ’ s earnings trajectory ( chart 13 ). the most advantaged graduates tend, over time, to recover, but the least advantaged can be permanently affected. xxvi in the extreme, prolonged recessions can lead to permanent labour market scarring, with potentially devastating effects on livelihoods, identities and communities. xxvii that is perhaps why studies of expansionary monetary actions generally find they reduce, not increase, inequality while raising demand and supporting jobs. xxviii and there appears to be little evidence that stimulative monetary policy makes groups worse off. do these lessons apply to the most recent uk recession and recovery? macroeconomic outcomes the 2008 financial crisis threatened depression and mass unemployment, with the least well - off most exposed. fiscal policy quickly came under severe strain as tax revenues plunged, the costs of social benefits rose sharply, and the huge bills for too - big - to - fail banks came due. since then sustained austerity has reduced the fiscal deficit from around 10 % of gdp in 2010 to around 3 ½ % today. while necessary, this has, on average, subtracted around 1 percentage from demand each year. over that time, structural policies have boosted participation in the labour market but have been unable to return productivity growth to anything resembling its historic average. for seven years, in the face of severe head

stateless corporations. as the prime minister recently stressed, companies must be rooted and pay tax somewhere : businesses operating across borders “ have responsibilities … in terms, for example, of payment of tax. ” they must recognise “ the role that they play in local communities and the responsibilities that they have in any country they are operating in to abide by the rules. ” all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx that is why the g20 ’ s beps initiative, which will allow all countries to work together to implement measures against tax base erosion and profit shifting, is so important. and that is why the g20 might at least consider, as larry summers has suggested, a minimum tax on reported earnings to be paid somewhere. because technology and trade are constantly evolving and can lead to rapid shifts in production, the commitment to reskilling all workers must be continual. in a job market subject to frequent, radical changes, people ’ s prospects depend on direct and creative engagement with global markets. lifelong learning, ever - greening skills and cooperative training will become more important than ever. finally, in an age where anyone can produce anything anywhere through 3 - d printing, where anyone can broadcast their performance globally or sell to china whatever the size of their business, there is an opportunity for mass employment through mass creativity. technology platforms such as taskrabbit, alibaba, etsy, and sama can help give smaller - scale producers and service providers a direct stake in global markets. smaller scale firms can by - pass big corporates and engage in a form of artisanal globalisation ; a revolution that could bring cottage industry full circle. indeed, why doesn ’ t the g20 pursue global free trade for small and medium size enterprises ( smes )? xxx global free trade for smes, connected via such platforms, holds out the prospect of a more inclusive form of global commerce with the individual at its centre. vii. conclusion : the current monetary policy outlook allow me to conclude by touching on the current outlook for monetary policy. the mpc indicated in the spring that the impact of a vote to leave the eu on inflation would be the product of its impact on demand, supply and the exchange rate. and it stressed then that the implications for monetary policy would not be automatic. in august, the balance of these demand, supply, and exchange rate effects was consistent with the need