You might have supposed that this would have weakened the exchange rate, 1  BIS Review 7/2000  shielding us in some degree from weakening external demand growth - but not a bit of it - the exchange rate actually strengthened! But the easing of monetary policy may have helped to reverse the sharp fall in domestic confidence evident throughout the UK economy in the second half of 1998, and to avert the widely predicted slide into recession. In any event, after coming to a virtual stand-still in the fourth quarter of 1998, the economy as a whole bounced back last year, driven largely by domestic demand growth. And, for the economy as a whole, we can now, since 1992, point to the longest period of sustained low inflation - averaging 2.7% on the Government’s target measure, with relatively steady annual growth averaging 2.8% - well above most estimates of our long-term trend rate, together with a sustained rise in the number of people in employment - to an all-time high and an almost continuous month-by-month fall in the rate of unemployment to the lowest rate for about 20 years. But if the performance of the economy as a whole has been relatively encouraging over this period, that is clearly not the case for every sector of the economy. And I am only too well aware that the internationally-exposed sectors - most of agriculture, much of manufacturing industry and some services sectors - wherever they are located within the UK, have suffered.
The Government is also keen to reduce market impediments in order to help expedite the development of the bond market. Therefore, this year can be a year of many opportunities where a lot of progress can be made. And to foster its success, a close cooperation between the public sector and the private sector will be vital so that progress made in the bond market will be consistent with the needs and the expectation of the private sector. This is important because, at some point in the longer-term, development of the bond market will need to be driven by market rather than by policy. Hence, your active contribution and cooperation will be vital in fostering the success in the development of the Thai bond market in the longer-term. BIS Review 29/2005  3