and inflation. but following the financial crisis, manufacturing productivity growth fell back sharply. this fall in manufacturing productivity is the main cause of the slowdown. the reasons behind it are much debated – and productivity may be harder to measure in the modern economy where businesses invest as much in intangible capital, like software and branding, as in physical capital, like buildings and machinery. measurement problems could be a big part of this. but much also points to structural change. perhaps new ideas have become harder to come by, or perhaps technological innovation and specialisation have faded as globalisation slowed. bank of england whatever the reason, when productivity growth is weak, companies gain less from installing new capital. so weaker productivity growth has meant that firms have sought to borrow less to finance investments at a given interest rate. this reduction in the demand for capital has lowered the equilibrium rate. the second important factor is population ageing. chart 5 : population ageing is expected to continue age distribution in the adult ( 16 + ) uk population ( a ) ( a ) dashed line and hashed bars are calculated using the ons 2020 - based interim national population projections : year ending june 2022 estimated international migration variant. sources : ons and bank calculations. chart 5 shows the age distribution for the united kingdom. the share of the adult population aged 20 - 59 has fallen below 65 % in the past decade, and it is set to decline further in the coming years. this population ageing has been driven by a decline in birth rates relative to the high levels seen in the years that followed the second world war – as well as by the happier news that people now live for longer. as people accumulate savings over their working life to fund their retirement, wealth in the economy increases as the age distribution shifts towards older cohorts ( indicated in this chart by bars in different colours ). so ageing households have sought to lend more at a time when less productive firms have sought to borrow less. the only way to establish an equilibrium between the supply and demand in the market for investable funds – that is, to incentivise firms to invest this bank of england additional wealth into productive capital – has been for the price of those funds, the real interest rate, to fall. the trend equilibrium rate, r *, is like a long - term anchor for monetary policy. as r * has fallen, monetary policy has moved with it. this is an important point. the low level of interest rates over the past

risks and try, it is not a guarantee we will succeed, but we have a chance to turn things around. just as pope francis advised our young people during his recent visit to singapore to have the courage to leave our comfort zones and take some risks, we shall do the same with our review, and be willing to try and take some calculated risks. in assessing our options, we will focus on what are singapore's strengths and what is our value proposition to investors and the companies who are seeking listing. for example, singapore has established ourselves as a leading reits hub by identifying a market need and creating a supportive regulatory framework and ecosystem to nurture its growth. today, we are the largest reits market in asia ex - japan2. i believe there can be other such opportunities for singapore's equities market – not to go head - on against the larger exchanges, but to identify areas where we can add value by playing to our strengths. a. for instance, could our market be a trusted venue to facilitate investor flows into mid - sized regional companies, who can enjoy better brand and investor familiarity within their own backyard compared to listing in a larger global market? being a big fish in a smaller pond can be a more attractive value proposition compared to being an ikan bilis or ikan kuning in a big ocean. i thought of these two fishes because they are often found in nasi lemak, which is one of my favourite local dishes. b. singapore and our region have also seen a strong burst of entrepreneurship and produced many good quality growth companies. singapore should aim to provide a platform for these asian companies to raise funds and support their future growth. a robust equities market provides a venue to facilitate successful ipo exits – which allows private equity and venture capitalist investors to recycle capital into other startups and early - stage growth companies. this completes a virtuous cycle of growth, innovation and a more vibrant financial market. this is why the government is considering policy measures and incentives to improve singapore's equities market and enterprise financing ecosystem. these are important elements of our business ecosystem to support a competitive economy. a. the equities markets review group that mas has set up will take a closer look at the challenges we face and recommend measures that can position singapore's equities market for growth. b. our objectives are clear ; to develop an equities market that provides an attractive venue for local and regional enterprises