I have endeavoured to show that a higher level of economic activity and faster growth, combined with monetary and wage stability, can accelerate progress towards the lasting adjustment of the public finances. The price stability that we have regained with a monetary policy that at times has had to be extremely rigorous, must be bolstered by a competitive and expanding real economy.
By pursuing a stable policy from the summer of 1994 onwards we brought the rate of inflation back into line with that of the leading industrial countries. Wage moderation, the drastic reduction in the Treasury borrowing requirement in 1997 and the weakness of prices in international markets have helped considerably in the curbing of inflation; as a consequence, long-term interest rates have come down.