In the event, the unemployment rate in the UK peaked at 8.5%, or 2.7 million people. •  Since 2013, the UK unemployment rate has fallen sharply, to a rate of 5.3% or 1.8 million people. This fall in unemployment is considerably faster than the MPC, and other outside forecasters, had predicted. At the start of 2014, the MPC forecast that the unemployment rate today would be more than a percentage point higher than its current rate (Chart 1). •  The main reason for this striking fall in the unemployment rate has been very strong rates of new job creation. Since 2010, more than 2 million new jobs have been created in the UK. The lion’s share of these new jobs – around two-thirds – have been full-time positions and in highly-skilled professions (Chart 2). The level of employment is at a forty-year high. •  This rise in the demand for workers has been met, in part, by increased participation in the workforce. Participation by women has picked up strongly and is now close to its all-time highs. So too has participation by those aged over 50, in part taking advantage of more flexible working practices and removal of the official retirement age. •  The other end of the age spectrum has also seen improvement. The percentage of 18–24 year olds who are not in employment, education or training – the so-called “NEETs” – has fallen sharply from close to 17% to below 13%.
– flexible: we cannot guarantee 2.0% either all the time or straight away. – and, consequently, medium-term. This medium-term target needs to be viewed in two ways: it is forward-looking, to guide inflation expectations; but it cannot completely ignore the past either. Should we go as far as targeting an average level of inflation of close to 2%, and therefore explicitly compensate for any undershooting or overshooting of the target over time? This question remains open, and will be part of the “strategic review” of monetary policy that the ECB will pick up again in the next few months. One key question in this case would be the period over which the inflation average would be measured: I think the public health crisis could provide some justification for this sort of “averaging”, at least temporarily, starting as of the beginning of the crisis. In the American debate, this is called TAIT (Temporary Average Inflation Targeting). Independence in implementing the mandate The ECB is independent on two levels. First, its action in implementing the mandate entrusted to it democratically under European legislation is not subject to approval by national governments, nor to national legal interpretation. Second, in its action, the ECB never submits to pressure from the market or from trends in the media. In the current context of an unprecedented rise in public debt, this independence is more important than ever. France’s debt should exceed 115% of GDP by the end of this year.