Our medium-term inflation targeting framework – which has been in place for two decades now – has achieved this and we are committed to making sure that we continue to deliver. But realistically, the additional contribution of monetary policy to improving productivity growth is only modest. The solutions clearly lie elsewhere, in the hands of both the private and the public sector.
Improving productivity is not simply a matter of the “government fixing the problem”. The private sector has a central role to play too, as it is the private sector that is the main developer of new products, the main source of innovation and the main employer of people.