The Governor of the Bank of England has said that Britain should hold the EU in or out referendum, promised by the Prime Minister, as soon as possible.
Speaking on the Today programme on BBC Radio 4, Mark Carney said that the continued uncertainty regarding the outcome of the EU poll would hurt the economy if companies decided to postpone investment plans.
Carney said that many businesses were already expressing concern about the possibility that Britain could leave the European Union and that it was in everybody’s interests if the poll took place ‘as soon as necessary.’
The European Union is the world’s biggest economy, it is the biggest investor in Britain and the biggest destination for UK investment.
Prime Minister, David Cameron, has promised an EU referendum by the end of 2017. Mark Carney’s words will fuel speculation that the poll could take place next year.
The Bank’s Governor was keen to play down the theory that low productivity in the UK and weak wage growth are caused by the influx of cheap labour from Eastern Europe. He argued that there are more Britons prepared to work longer hours and older people willing to work close to and beyond retirement age, and that this is why wages have not grown significantly.
Carney explained that over the last two years, three thousand older workers have stayed in the labour market than were doing so more than two years ago. Moreover, people are working longer hours which, in effect, adds up to another 200,000 workers, the equivalent of an extra 500,000 workers in total. Net migration over the last two years has been only one tenth of that, 50,000 workers.
Carney also argued that migrants add to productivity because they usually first find employment in jobs for which they are overqualified, before moving into jobs that are more suited to their abilities.
