Deputy Bank of England governor apologises for calling UK economy 'menopausal'

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A deputy governor of the Bank of England has apologised for calling the UK economy “menopausal” in an interview, saying that this was a “poor choice of language”.

The UK’s productivity has stagnated since the global financial crisis a decade ago, and data on Wednesday shows that it has slipped again in the first quarter of 2018.

Ben Broadbent, deputy governor for monetary policy, suggested in an interview with The Daily Telegraph, published on Wednesday, that this might be analogous to Britain’s “climacteric” productivity growth slump of the 1880s.

Mr Broadbent told the paper that climacteric means “menopausal, but can apply to both genders... you’ve passed your productive peak”.

He said: “I once got an economist into the [Monetary Policy Committee] to explain the origins of the word ‘climacteric’. As soon as he started talking to all these middle-aged men – about [how] it means you’re past your peak and you’re no longer so potent – they all said, ‘We understand’.”

But later on Wednesday morning Mr Broadbent released a message saying: “I’m sorry for my poor choice of language in an interview with the Telegraph yesterday and regret the offence caused. I was explaining the meaning of the word ‘climacteric’, a term used by economic historians to describe a period of low productivity growth during the 19th century. Economic productivity is something which affects every one of us, of all ages and genders.”

The Bank is acutely sensitive to perceptions and accusations of sexism, due to a chronic underrepresentation of women in its senior ranks.

Regardless of the semantics, Mr Broadbent’s analysis does not imply that UK productivity growth will never return.

After the 1880s pause the UK’s growth picked up rapidly as new technologies, such as electricity, were deployed.

Some economists argue that development of digital and artificial intelligence technologies today mean the UK and the global economy could be on the verge of another boom, despite the feeble performance of recent years.

Overall UK GDP growth slumped to just 0.1 per cent in the first quarter of 2018, according to the preliminary estimate of the Office for National Statistics. This was the weakest expansion in more than five years.

But overall hours worked grew by 0.6 per cent in the three months, meaning that output per hour productivity is judged to have fallen by 0.5 per cent.

This is extremely disappointing because it follows two quarters of the strongest productivity growth in the UK since the financial crisis in the second half of 2017, which some economists had hoped was a turning point.

The first-quarter GDP growth collapse prompted the Bank of England to hold off from raising rates again last week, despite previously signalling that it was likely to put up the cost of borrowing, although it still argued that the latest UK growth figure was likely to ultimately be revised up to 0.3 per cent.

The Bank has come under fire for sending confused messages to financial markets on the likely timing of rate rises.

But Mr Broadbent brushed aside that criticism in his interview.

“I was in those same financial markets and it was my job. I have done it,” he said, referring to his previous career as a Goldman Sachs economist.

“We’re not going to spoon feed them meeting by meeting.”