Tuesday, 2 July 2013

Britain's baby boom will affect our economy more than anything Mark Carney does

By Allister Heath

Over time, babies matter far more to an economy than even the cleverest of central bankers. The wealth of nations is determined by how many workers they host, and how productive their citizens are.

The extent of Britain’s resurgent birth rate is as stunning as it has been overlooked. A remarkable 729,400 babies were born in England and Wales in the year to June 2012, the most for 40 years, according to the Office for National Statistics. Combined with an elderly population that is living longer, the gap between births and deaths is rising, and this, rather than net immigration, is what is driving the majority of the UK’s population increase (though many of the babies born are to migrant parents). 

That means that Britain’s extraordinary baby boom – births are at their highest level since 1972 – will end up proving immensely more significant to our long-term prosperity than whatever tweaks to monetary policy Mark Carney, the Bank of England’s new Governor, chooses to introduce.

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