Quite apart from the more general uncertainties, there have inevitably been a series of surprises (or "shocks" in the jargon) - including a persistently stronger than expected exchange rate against the euro, pronounced swings in the oil price, or varying rates of increase in excise duties, for example, any of which can have a significant and persistent impact on the out turn. That's not a matter of selfjustification - it may well be more by luck than judgement; to be honest I'm more interested in the result. But I am concerned that people should understand that operating monetary policy is an inevitably imprecise process, and that they should not expect from it more than it can deliver. But however that may be, the even better news is that since 1992, stable, low, inflation has been accompanied by steadily increasing overall output and employment, and by a progressive fall in the rate of unemployment. Over the same period, to the fourth quarter of last year, GDP growth averaged just under 3% a year which is well above most estimates of our trend rate of 2¼%-2½%. GDP had in fact grown for 37 successive quarters which is the longest period of sustained quarter-by-quarter growth we have enjoyed since quarterly records began in the UK in 1955. Employment has increased steadily from a low point of 25½ mn people in the Spring of 1993 to its current level of 28 mn.
And the rate of unemployment fell from a peak of over 10½% on the LFS measure to around 5% last summer; on the claimant count measure it fell from some 10% to just over 3%, which meant that the number of people claiming unemployment benefit, at under 950,000, was the lowest for 26 years. Short-term interest rates are at a 38-year low. All of that it seems to me gives the lie to a view that was quite widespread a decade ago, that sustained low inflation would inevitably mean continuous suppression of the real economy. I'd go further myself and suggest that it provides considerable positive support for the central bankers' credo. Now some of you - given what's been happening to your own businesses, to certain particular business sectors, and in regions of the country where those sectors are particularly heavily concentrated - may think that I've been living on a different planet. The problem is - and it is a real problem - that with the best will in the world macro-economic stability, the stability of the economy as a whole, cannot guarantee stability at the more micro-economic level: it can not guarantee the prosperity of every individual business or even of whole business sectors or geographic regions.