Manufacturing key to prosperity, Bank of England boss tells Express & Star

Speaking exclusively to the Express & Star, Andy Haldane said that Britain's economy was still reliant on a thriving manufacturing industry – one that he said the West Midlands had a 'hugely important' role in maintaining.

He said manufacturing in the region was vital in terms of helping prevent the UK's trade deficit from growing and supporting other sectors of the economy.

Mr Haldane, who addressed students at Dudley College during a visit to the Black Country, said: "I would say manufacturing is still very important to the economy as a whole.

"I think it is false to think there is a right fraction for manufacturing in the economy. You back up 100 or 200 years and manufacturing was dominant. The UK was at the very centre of the industrial revolution and this part of the country was at the heart of it.

"But times move on and the balance of our economy has changed such that manufacturing is no longer dominant – but it is still very important.

"One of the reasons is because we export a proportionately larger amount of the goods we produce relative to the services we produce. Therefore, if we are to keep our trade deficit from not getting too large then manufacturing can help in that respect.

"It also very importantly provides support to other parts of the economy, not least the services part.

"Those services businesses are reliant on other businesses to tick over. If one part of the economy is struggling that will inevitable ricochet back to other parts of the economy as well.

"I think a strong manufacturing base is key for a strong economy and very important for a strong trade economy. That's why so much focus is being placed in supporting and building skills in that part of the economy."

'No need to be held hostage'

Official UK GDP figures for the final quarter of 2015 are due to be released this week, and are expected to show that growth has remained modest in the face of a global slowdown in global economies.

Last year manufacturers were hit by a strong pound making UK exports more expensive, as well as a slump in orders for machinery from the North Sea oil and gas industry after a drop in oil prices.

But Mr Haldane, who sits on the Bank of England's Monetary Policy Committee, insists the UK should not be 'hostage' to global forces and should instead focus on supporting jobs and growth in manufacturing.

"We know that from developments here in the West Midlands and other areas that have seen some industries grow and others contract," he said.

"Global forces will determine how much gets produced and where it gets produced, but that doesn't mean we are a hostage to global forces.

"There are things we can do here in the UK to support industry and to support jobs and to support growth.

"You always want a workforce that is well educated and has good skills.

"If you have that it doesn't matter if they work in steel, in petro-chemicals or in IT, there will be jobs for them. There will be businesses looking out for skilled workers. That's one of the reasons I try and encourage those skills.

"Whatever sector they are working in they will produce. You also want infrastructure to support businesses and that could be in terms of transport, schools, and hospitals.

"If you have those core ingredients then you will attract new businesses, both from overseas and the UK whatever happens to particular industries, steel or elsewhere, there will always be other businesses that can pick up the slack if one happens to hits problems, as the steel industry clearly now has done."