The new method, where one follows the prices on a top list for books sold, probably gives greater variations than the old method where one followed the prices on a number of indicator books. The top list changes every month, while the indicator list changed less often. Sales are now captured to a greater extent than before. 27 Foreign air travel was not included in Table 1, but a new method of measuring prices has contributed to a new seasonal pattern with a higher volatility in recent years. 14 [19]  Underlying measures and actual monetary policy The different measures of underlying inflation give us the opportunity to approach the existing data and view it from different angles. But in the next step, the measures will be used by policymakers responsible for monetary policy. Here a conflict arises between on the one hand bringing forward various underlying measures and on the other hand being clear and transparent about the objective of monetary policy. The conflict become particularly clear if one chooses to use measures of underlying inflation that systematically deviate from the actual rate of inflation. Or, in other words, the poorer the measure of underlying measure of inflation, the greater the communication challenges. I would say that we have seen clear examples of this conflict in recent years: In June 2018, analysts at Handelsbanken Capital Markets considered it necessary to deny that the Riksbank had changed its target variable in a newsletter.
6 The Bank of England set out in its July 2019 FSR its intention to test the UK financial system’s resilience to the physical and transition risks of climate change. It will gather views on the design of the exercise and, as a first step, will publish a discussion paper in autumn 2019. More information available at: https://www.bankofengland.co.uk/-/media/boe/files/financial-stability-report/2019/july-2019.pdf. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  Such “tilt” investment strategies, which overweight high environmental, social and governance (ESG) stocks, and “momentum” investment strategies, which focus on companies that have improved their ESG rating, have outperformed global benchmarks for close to a decade.7 The mainstreaming of such strategies and the tools to pursue them are essential. At present, one of the biggest hurdles to doing so is the inconsistent measurement of ESG. We need a common taxonomy to help financial markets rigorously identify environmental outperformance and to direct investment accordingly. The EU’s Green Taxonomy and the Green Bond Standard are good starts, but they are binary (dark green or brown). Mainstreaming sustainable investing will require a richer taxonomy – 50 shades of green. One promising option, highlighted in this week’s initiative of UN’s Climate Financial Leaders, is the development of transition indices composed of corporations in high-carbon sectors that have adopted lowcarbon strategies.8 Such approaches are essential for our citizens to make sure their money is invested in line with their values.