Regional recovery in a diverse union

This article reviews the diverse state of economic recovery across the Euro area and across the UK. Distinctions are drawn between the experiences within the Euro area, particularly among the high debt countries, and the UK. The focus then turns to whether the ongoing reforms set out in the Four Presidents’ Report “Towards a Genuine Economic and Monetary Union” address the right issues. Turning to the most recent evidence on regional disparities within countries, it is clear that challenges remain, both for the Euro area and the UK. In the case of the UK, recent evidence on regional disparities in house prices present a challenge for the Bank of England and its Financial Policy Committee and are
likely to provide a challenge to the use of its macro-prudential policy toolbox in the near future.