In recent years, many central banks have tried to enhance their impact on financial markets and the economy by giving explicit direction about future policy, or what we call forward guidance. Since this is a speech about transparency, let me be absolutely clear what I mean by that. Central banks make forward-looking statements all the time because monetary policy takes time to affect inflation.
We have a primary mandate enshrined in a Treaty which has been negotiated, signed and ratified – either by Parliaments or by the people – by 27 exemplary democracies, 25 without an opting-out clause. This is the mandate that was given to us by our fellow citizens!