The Government and the Bank also agree that monetary policy should continue to support maximum sustainable employment. We recognize that maximum sustainable employment is not directly measurable and is determined largely by non-monetary factors that can change through time. This reflects the reality that maximum sustainable employment is more of a concept than a number.
In practice, knowing when we’ve reached it is difficult because we have to infer where it is, and labour market indicators give us clear signals only when we are well above or below it. Finally, well-anchored inflation expectations are critical to both price stability and maximum sustainable employment.