about the economy have been as much if not more about understanding post crisis changes in the level of supply as about the level of demand. we spend more time now discussing the supply side in the mpc – mentions of ‘ supply ’ and ‘ productivity ’ in the minutes of mpc meetings have doubled, relative to mentions of other terms, between 2006 and 2014. productivity is also a key determinant of the growth in real incomes and so affects the demand side of the economy as well. drivers of the economic recovery over the past two years, uk economic growth has averaged 2. 5 % ; stronger than most of our g7 partners and we are forecasting that to continue. but our productivity growth has been dismal how is it possible for us to have grown relatively strongly with poor productivity performance but without generating inflation pressure? the answer is simple. we have grown by using the spare labour supply in the economy after the great recession. this spare labour supply was not just the post - recession stock of unemployed workers. it was also people who were in work but wanted to work longer hours. it was people who were not previously participating in the workforce who now wished to work. it was people who we would have expected to retire but who decided to stay in work. and it was workers from abroad. it is true to say that this reservoir of labour supply available to the economy has been larger and deeper than we or others would have predicted on pre - crisis trends. we have had what economists would call a “ positive labour supply shock ”. the crisis, recession and hit to living standards have clearly changed attitudes to work ; more people want to work and work more hours than before. and the impact of those two domestic trends – higher participation in the workforce and people wanting to work more hours – are the most important elements of this positive “ shock ” relative to what we expected, outweighing factors like higher net inward migration. the numbers are striking. in the 10 years prior to the crisis, growth in the hours worked in the uk economy, accounted for 23 % of the uk ’ s overall economic growth. the mainstay of our economic growth, the other 77 %, came from growth in productivity. since 2013 only 9 % of our annual economic growth has come from productivity improvement. the remaining 91 % has come from the increase in the total hours worked as a result, employment in the uk is now around its highest rate since comparable records began in 1971. over 73 % of people aged

( dtl ) in eligible government securities. in view of the statutory pre - emption and the long duration of the government securities, banks were permitted to exceed the limit of 25 per cent of total investments under held to maturity ( htm ) category provided the excess comprised only of the slr securities, and the total slr securities held in the htm category was not more than 25 per cent of their dtl. such shifting was allowed at acquisition cost or book value or market value on the date of transfer, whichever is the least, and the depreciation, if any, on such transfer was required to be fully provided for. the above transition is consistent with international standards that do not place any cap on htm category, and was considered advisable taking into account the statutory nature of the slr while ensuring prudence and transparency in valuation on transfer to htm category. while the earlier prescription for this category was relatively more conservative, the changes in september 2004 recognised the dynamic interface with the interest rate cycles and were counter - cyclical. capital adequacy – risk weights in view of the increase in growth of advances to the real estate sector, banks were advised to put in place a proper risk management system to contain the risks involved. banks were also advised to put in place a system for ensuring proper checking and documentation of related papers before sanctioning / disbursing of such loans. in june 2005, the rbi advised banks to have a board mandated policy in respect of their real estate exposure covering exposure limits, collaterals to be considered, margins to be kept, sanctioning authority / level and sector to be financed. in view of the rapid increase in loans to the real estate sector raising concerns about asset quality and the potential systemic risks posed by such exposure, the risk weight on banks'exposure to commercial real estate was increased from 100 per cent to 125 per cent in july 2005 and further to 150 per cent in april 2006. the risk weights on housing loans extended by banks to individuals against mortgage of housing properties and investments in mortgage backed securities ( mbs ) of housing finance companies ( hfcs ), recognised and supervised by national housing bank ( nhb ) were increased from 50 per cent to 75 per cent in december 2004. however, on a review, banks were advised to reduce the risk weight in respect of exposures arising out of housing loans up to rs. 30 lakh ( usd 75, 000 approx ) to individuals against the mortgage of