below target. for those reasons, i have continued to vote to leave rates unchanged, with a neutral stance on the future direction of monetary policy. now more than ever in the uk, policy needs to be poised to move off either foot depending on which way the data break. general secretary. i have covered 250 years of labour market developments in 40 minutes. perhaps a robot could have done it in half that time or twice as well. perhaps “ peak andy ” has been reached. either way, these are issues i know the tuc will want to take seriously in its words and actions over the next 150 years, as it has over the past 150 years. thank you. bis central bankers ’ speeches references acemoglu, d ( 2008 ), “ introduction to modern economic growth. ”, princeton university press. aikman, d, haldane, a g, and nelson, b d, ( 2014 ) “ curbing the credit cycle. ” the economic journal. allen, r c ( 2001 ) “ the great divergence in european wages and prices from the middle ages to the first world war ”, explorations in economic history 38, 411 – 47. allen, r ( 2009 ) “ engels ’ pause : technical change, capital accumulation, and inequality in the british industrial revolution ”, explorations in economic history 46, 418 – 35. atkinson, a b, and stiglitz, j e, ( 2015 ) “ lectures on public economics ”, princeton university press. autor, d h ( 2003 ) “ outsourcing at will : the contribution of unjust dismissal doctrine to the growth of employment outsourcing. ” journal of labor economics, vol21 ( 1 ), pages 1 – 42. autor, d h ( 2015 ) “ why are there still so many jobs? the history and future of workplace automation. ” journal of economic perspectives, vol29 ( 3 ) : pages 3 – 30. barro, r j, and lee, j ( 2015 ) “ education matters : global schooling gains from the 19th to the 21st century ”, oxford university press. bis ( 2014 ) ‘ inflation : domestic and global drivers ’, bis 84th annual report page 49 onwards. broadberry, s, campbell, b m s, klein, a, overton, m, and van leeuwen, b “ british economic growth 1270 – 1870 ”, cambridge university press, working paper version available at http : / / www.

- 410. bernanke, b. and m. gertler ( 1989 ), “ agency cost, net worth, and business fluctuations ”, the american economic review, march 1989, pp 14 - 31. a lot of that has been securitised ( chart 5 ). for the household sector, spreads on securitised portfolios of both secured and unsecured credit fell between 2003 and 2005 ( chart 6 ). that will have contributed to the fall in effective rates on the underlying mortgages and personal loans ( chart 7 ). the same broad picture holds for the corporate sector ( chart 8 ). an illustrative decomposition suggests that, especially for sub - investment grade borrowers, the compression of spreads could not be explained solely by reduced compensation for default risk, with the excess possibly reflecting lower liquidity premia ( chart 9 ). 4 these falls in spreads were material relative to the changes in the mpc ’ s bank rate and to the risk - free yield curve. for example, in the latest “ policy cycle ”, we increased bank rate by 125bp over 11 months from august 2006. during that period, effective rates on new mortgages rose by closer to 50bp. in other words, from around 2003, monetary policy needed to take account of a progressive loosening of credit conditions. the tables have now turned. spreads have risen ; the issuance of securitised portfolios of household loans has collapsed ; corporate bond issuance has fallen ( charts 10 - 11 ). it is pretty clear that, for the time being, there has been an adverse shift in the supply of credit from the non - banking sector. in part, that seems to be due to investors becoming less confident that they can base decisions about exposures to complex credit portfolios on rating agency ratings ; this is akin to lenders deciding that their monitoring of risk was less good than they thought. in part, it is due to various types of non - bank investor in credit finding themselves facing actual or incipient liquidity pressures. both as cause and effect, liquidity in the capital markets is impaired. this is apparent in the opening up of a so - called “ negative basis ” between the spreads on corporate bond and on equivalent credit - default swaps, which unbundle the transfer of credit risk from the provision of funds and so are less affected by liquidity hoarding ( chart 12 ). a twin - engine financial system? at various