Third, we have all learned that the most important contribution a central bank can make to economic welfare is to maintain confidence in the future value of money. In the 1970s, we all witnessed the economic and social instability caused by high and volatile inflation. In the 1980s, we paid the price of recession to get inflation under control.
Since the early 1990s, our inflation-targeting regime has kept inflation low, stable, and predictable at 2 per cent. This, together with fiscal consolidation, has helped to keep growth more steady, employment to rise to historically high levels, and unemployment to fall to levels not seen for decades.