including through freer trade in services and more resilient financing of the investment needed to boost wages of workers in all industries across the uk. one million people across this country work in financial services. the industry contributes 7 % of output and pays taxes that cover almost two thirds of the cost of the nhs. at a time when the uk is running a 5 % current account deficit, financial services runs a 1. 5 % trade surplus with europe alone. the entire service sector runs a 5 % surplus with the world and employs 85 % of uk workers. we could take these realities for granted. and it would be all too easy to give into protectionism. but as we learned in the 1930s, that road leads neither to equity nor prosperity. raising barriers to trade disproportionately hurts the least well off through higher prices and fewer opportunities. fajgelbaum, p. d. and khandelwal, a. k. ( 2016 ), ‘ measuring the unequal gains from trade ’, quarterly journal of economics, vol. 131, issue 3, shows that past episodes of trade liberalisation have disproportionately benefited poor households, in every country, through reductions in consumer prices and increases in product variety. all speeches are available online at www. bankofengland. co. uk / speeches escaping the low inflation / low wage / low growth trap requires more than a textbook rebalancing of macro policies across the major regions. it demands comprehensive structural reforms and a new approach to trade policy. such changes could more than make up for the dramatic fall in the real incomes that uk households have experienced in the decade since the crisis. the brexit negotiations will be the test. may the hundreds in this room pass it by working towards innovative, cooperative and responsible solutions to the benefit of the tens of millions outside. as my colleague andy haldane noted in his speech ‘ productivity puzzles ’ ( available at http : / / www. bankofengland. co. uk / publications / documents / speeches / 2017 / speech968. pdf ), if productivity growth in the second, third and fourth quartiles of the distribution of uk firms ’ productivity could be boosted to match the productivity of the quartile above, then arithmetically that would deliver a boost to aggregate uk productivity of around 13 %. in the longer run, that increase in productivity would be expected to flow through fully into real wages. by contrast, the peak to

gentlemen, it is very clear that small - scale cross - border trade plays a very vital role in our economies, particularly in generating income, creating employment and alleviating poverty. however, ladies and gentlemen, the small - scale cross - border trade faces a lot of barriers and impediments, including lack of access to financial and payment services such as currency exchange and transmission facilities. traders from both sides of the border are forced to carry cash and must first convert funds into united states dollars from their respective countries and then into the domestic currency of the country they are purchasing goods or services from. by so doing, cross - border traders face many risks including theft, exchange losses and other conversion costs. ladies and gentlemen, although there have been some bilateral efforts towards formalising and facilitating small - scale cross - border trade in southern africa, these have not been bis central bankers ’ speeches enough. for instance, zimbabwe signed a memorandum of understanding with malawi to facilitate informal trade, especially between small and medium - sized enterprises. mozambique and zambia also signed a memorandum of understanding to facilitate the repatriation of currencies of the two countries that are accumulated by traders located along the common border areas. it is expected that this memorandum of understanding will be expanded to include malawi. the lack of financial and payment services has not only hindered small - scale cross border trade but also led to the establishment and entrenchment of parallel currency markets at the borders. needless to say, these are associated with vices such as counterfeiting, facilitating illegal trade, as well as enhancing cross - border money laundering activities. moreover, to us monetary authorities, illegal cross - border local currency circulation creates the potential for complicating the conduct of monetary policy, especially if a significant amount of a country ’ s domestic currency is being used outside its jurisdiction. the volumes of goods and services traded and amount of currency handled by individual traders may seem small. however, they are collectively significant and have implications for the conduct of monetary policy. for instance, the world bank estimates small - scale border trade in southern africa to be around $ 17. 6 billion. other studies have estimated that small - scale cross - border trading accounts for about 42 % of gdp in sub - saharan africa. ladies and gentlemen, it is for this reason that this roundtable symposium has been convened with the following objectives : 1. to stimulate broader interest in the topic of small scale cross border trade ; 2. to initiate an inquiry into the