Bank of England governor Mark Carney has stated that the UK should hold its EU referendum soon.
Businesses may delay making investments while there is uncertainty over the future of Britain in the EU, analysts fear. David Cameron has promised to vote on whether the UK stays in the EU by 2017. He also said that it was in everybody’s interest to resolve the uncertainty.
Investment in technology may be on the down low as companies may not be investing as much as they otherwise would do because of the wide pool of available workers.
Mr Carney said that older people willing to work and workers seeking more hours added 500,000 to the labour force over the past two years. Adding to this, migrant labour expanded the workforce but its impact was only a tenth of the size, according to the governor. He also told the BBC’s Today programme that he would reduce the argument that foreign workers were to blame for lower productivity and as the number of jobseekers falls, attention will flip to productivity.
During the global economic crisis, the UK’s level of productivity per worker fell and from this, productivity levels have taken longer to recover than expected. Inflation was 0% in March for a second month in a row, which is well below the Bank’s 2% target.
The UK might fall into deflation next month, said Carney, but inflation is expected to pick up towards the end of the year.