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BoE chief warns of strains from globalisation

Staff Writer |
Bank of England Governor Mark Carney warned that the openness of the world economy is endangered by growing frustration among many voters who are angry about a "lost decade" for their earnings.

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In a speech on the challenges on globalisation, Carney said many people in rich economies linked the lowering of barriers to trade and investment with low wages, insecure jobs, rootless companies and glaring inequality.

"The combination of open markets and technology means that returns in a globalised world amplify the rewards of the superstar and the lucky," he said in a speech at the Liverpool John Moores University.

"Now may be the time of the famous or fortunate, but what of the frustrated and frightened?"

Although global living standards have been rising since the 1960s, British workers are now suffering a first lost decade for inflation-adjusted earnings since the 1860s, Carney said.

Frustrations over living standards are considered to have been a factor behind Britain's referendum vote in Juen to leave the European Union, alongside concerns about immigration and a loss of sovereignty.

Carney warned about the risk of a return of protectionism in the global economy, a concern which has grown for investors since the victory of U.S. President-elect Donald Trump.

"Turning our backs on open markets would be a tragedy, but it is a possibility. It can only be averted by confronting the underlying reasons for this risk upfront," he said.

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