LONDON (AP) — Bank of England Governor Mark Carney has warned that governments and industry must do their part to spur growth and ensure that prosperity is more equally distributed to counter a rising tide of insecurity and anxiety.
In a powerful speech Monday in Liverpool, Carney compared the dislocations that followed the financial crisis of 2008 to those caused by the Industrial Revolution when Karl Marx was "warning of a specter haunting Europe."
Over the past 10 years, inflation-adjusted earnings in Britain have grown at slowest rate since the mid-19th century, he said.
"We meet today in the first lost decade since the 1860s," Carney said. "In the wake of a global financial crisis. And in the midst of a technological revolution that is once again changing the nature of work."
Governments around the world have relied on interest rates and other forms of monetary policy to address the impact of the 2008 financial crisis, making central banks "the only game in town," Carney said. But it is now time for a "balanced mix of monetary, fiscal and structural policies" to promote inclusive growth.
The remarks are likely to raise eyebrows in the British government, where some have criticized Carney for what they deemed to be meddling outside of his remit. Lawmakers who favored Britain's exit from the European Union took particular issue with Carney's dire predictions about the economic implications of Britain leaving the 28-nation bloc — and British voters in June chose to do that anyway.
Carney said governments must face the fact that free trade and technological developments are leaving some people behind, even as they increase global prosperity. This means that developed countries must redistribute some of the gains produced by these developments and retrain workers to succeed in the new economy.
Corporations operating across borders must also recognize that they have responsibilities in their local communities, including paying their taxes, he said.
"The combination of open markets and technology means that returns in a globalized world amplifies the rewards of the superstar and the lucky," he said. "Now may be the time of the famous or fortunate, but what of the frustrated and frightened?"