Annual inflation - on the present RPIX target measure - perhaps fortuitously - I don’t really mind averaged exactly 2.5% over the past 10 years. But more than just consistently low inflation, we have also enjoyed continuous quarter by quarter GDP growth, over the 10 years to the first quarter, at an average four-quarterly rate of 2.9% - which is well above its earlier trend. And the rate of employment has recently been around its all-time high, with the number of people claiming unemployment benefit at around a 25 year low - and that’s true for the UK as a whole and in almost every region. Of course it hasn’t all been plain sailing. We’ve had to cope with a painful imbalance within the economy over the past few years as a result of successive storms emanating from overseas. And it has been truly painful for the externally-exposed sectors of our economy. To stay on course while those storms persisted we’ve had to compensate for the external weakness by accepting - indeed positively encouraging through monetary policy - domestic consumer demand growth at a rate that we knew could not be sustained indefinitely. We have been helped more recently - and it’s not often you’ll hear a central banker say this - by a timely increase in public spending, consistent with your own rules designed to ensure medium-term fiscal sustainability. Without that we’d have been even more dependent upon the consumer.
I invite you all to rise and to join me in a toast of good health and prosperity to “The Lord Mayor and the Lady Mayoress”. BIS Review 29/2003  3