That said, neither the MPC nor the FPC can afford to be complacent. The past five years or so have presented the policy makers here and elsewhere with many difficult challenges. We have discovered that we knew even less about the workings of the economy than we thought we did. And we have moved into policy territory that we could scarcely have imagined during the halcyon days of the Great Moderation. Happily, there are signs that a recovery is at last starting to gain traction here in the United Kingdom. But there is still a long way to go before we can say the economy is mended. Until that is the case, monetary policy will need to remain supportive and the guidance we issued in August was intended to make that clear. Thank you! The UK economic outlook Society of Business Economists Annual Conference Charlie Bean, Deputy Governor for Monetary Policy 22 October 2013  2  6  This point was originally made in a Credit Suisse note entitled “Market to Mark”, 4 September 2013.
What a relief, one might think, that we consumers don't have to pay for all this. But who is it that has to pay? Because someone ultimately has to bear the costs. It is easy to initially assume that it is the retail trade and the banks that benevolently pay for payments. But it is not that simple. The merchants need to have their costs covered; otherwise they will not be able to run their businesses. And the same applies to the banks. The costs of all payments therefore gradually arise as the markups on the prices of the goods and services we buy. Milk and vegetables may become a little more expensive in the shop and the interest on our deposits at the bank may be a little lower than would otherwise have been the case. It is thus we consumers and bank customers who ultimately pay the costs of all payments. But we do not see them. We are therefore led to believe that they do not exist – or that someone is paying them. Shouldn’t the actual costs be visible? Is this a good system? Normally, we want to be able to see what various goods and services cost. The price helps us decide how much we will buy. We do not have any such price signals regarding the different methods of payment. The real prices are hidden. And this raises the question: If we knew what it actually costs, would we change our method of payment?