MEMBER OF THE MONETARY POLICY COMMITTEE
BANK OF ENGLAND
SOME CURRENT ISSUES IN UK MONETARY POLICY
UBS Conference centre, London
28 October 2008
I would like to thank Neil Meads, Paolo Surico and other colleagues for comments. The views
expressed are my own and do not necessarily reflect those of the Bank of England or other members of
the Monetary Policy Committee.
Ladies and Gentleman, thank you for coming. I should begin by saying how grateful
I am to UBS for organizing this speaking engagement.
I don’t need to remind you all that these are challenging times for economic policy.
We meet here today against a backdrop of anxiety about economic prospects here in
the U.K. and around the world. Recent rises in energy and food prices have squeezed
real take home pay over the past year and pushed annual CPI inflation to 5.2%. At
the same time, the economy is weakening with the initial third-quarter estimate of
GDP growth in the U.K. at -0.5%.
The evolving issues in the financial sector, described rather colourfully by ex-
Chairman Greenspan last week as a financial tsunami, have lead to a series of major
policy initiatives around the world. Many of these were unimaginable a year ago.
Against this backdrop, the MPC is in the process of putting together its forecasts for
the November Inflation Report. This will allow us to take stock of these events as
best we can and to reach our best collective judgement on the outlook for the U.K.
economy. In the present climate, this task will prove unusually challenging.
I want to use this opportunity to share with you a few thoughts on where we have
been and where we might be going. I also want to discuss the role of monetary policy
in the current economic climate given conditions in financial markets.
I still believe, as I have for a number of months, that we should think of the current
events as a pe