Rachel Lomax: Stability and statistics Speech by Ms Rachel Lomax, Deputy Governor of the Bank of England, to the North Wales Business Club, Llandudno, Wales, 23 November 2004. I would like to thank Simon Hayes and Jens Larsen for research support and Spencer Dale, Mark Cornelius and colleagues at the Bank of England for helpful comments. *  *  *  “The first time we saw the MPC we were given the folder of all the statistics they had which was something like a foot high. We found it hard to believe that they all read that stuff but they claimed they did.Statistics seem to be their life blood…” Chairman, House of Lords, Select Committee on Economic Affairs, HL Paper 176 - II. The past decade has been a time of unparalleled stability for the UK economy. It is more than twelve years since the United Kingdom experienced a single quarter of negative GDP growth. Consumer spending, investment and output have all shown a degree of stability over the past ten years which is unmatched in any decade since the war - indeed in the twentieth century. Inflation has been impressively stable too, as well as lower on average than at any time since the war. And, to complete the story, employment has grown steadily, and unemployment has fallen to a 30 year low. A stable economy has created a much better climate for business. So no wonder soaring oil prices make people nervous.
The main reasons for changing payment habits include the increased convenience of the electronic payments, for example increased limit on the amount of contactless payments, the perceived risk of infection from banknotes, governments’ recommendations to use cash less, as well as more difficult access to and lower acceptance of cash at the points of sale. This trend in payments is unlikely to be reversed. Almost 90% of the respondents stated that they would continue to use cash less once the pandemic is over. Similar trends in payment habits can be observed in our country as well. Consumers have shown strong preferences for using cashless instruments such as cards. For example, the number of payment transactions initiated on the virtual point of sale last year doubled and continued to raise at double-digit growth rates this year. Also, the volume of contactless card payments increased by about 50% in 2020 and this trend has continued this year. Obviously, advancement in technology opens the doors to innovative digital services, but to unlock its true value for businesses and consumers, we as regulators have a role to play. In this context, clear example is the Payment Services Directive 2 (PSD2) that opened up EU payments market to higher competition, by establishing a level playing field for traditional players and new entrants, while providing higher protection for consumers. The new concept of open banking was conducive to richer payment landscape with numerous new entrants (third party providers) and numerous new customer-centric services.