I have been involved in attending or speechwriting for this dinner for 25 years, and I well remember in the early days that the speeches of Lord Mayors featured each year a plea to get Crossrail agreed, started, finished. Well finally, Lord Mayor, you can notch that one up. Now, “getting stuff done” is not a lead in to a speech on reforming Solvency 2. I can hear the murmur of relief going round. Instead I am going to talk about the economy and monetary policy. I think I just heard someone say, can we have Solvency 2 for light relief please. Fair point, but no. A member of the public sent me an email recently, in which she said that she appreciated what I am doing, but can I please, please, please be more cheerful. I should say that I do seek earnestly to avoid the role of Private Frazer in Dad’s Army – we are not doomed, far from it. But we are in difficult times. From the perspective of monetary policy, these times are the largest challenge to the monetary policy regime of inflation targeting that we have seen in the quarter century since the MPC was created in 1997. That emphatically does not mean the regime has failed. Far from it. The regime was set up for times exactly like these. The regime, founded on central bank independence, is now more important than ever. The worth of any regime is tested in the difficult, not the nice, times.
At its next meeting, it is also time for the MPC to discuss the strategy for beginning to sell the gilts held in our Asset Purchase Facility portfolio. We will publish, alongside the Monetary Policy Report, more detail on how we will do this, to allow financial market participants to make the necessary preparations. This will ensure we have the option to commence a sales programme shortly after a confirmatory vote by the MPC, which could be as early as at our September meeting. Based on analysis conducted in conjunction with colleagues at the DMO, we are currently looking at a total reduction in the stock of gilts held by the APF, which covers both sales and gilt redemptions, of something in the region of £ in the first year. Our Market Intelligence suggests that’s broadly in line with what market participants are expecting. Let me end by going back to the plea that I be more cheerful. Lord Mayor, let me tell you about one thing that has made me most proud as Governor this year. Recently, the Governor of the National Bank of Ukraine, asked me if we had any spare armoured vehicles. He wanted to use them to support cash distribution around Ukraine. It so happened that we have stopped using our own transportation to move bank notes around this country, and our fleet of three vehicles was due to be taken out of service. Our staff immediately set about getting them ready, drove them to the Polish-Ukrainian border and handed them over.