UK headline inflation over that period was of course affected by externally generated disinflation pressure from the sudden and very substantial drop in energy prices. But over that period, the average of a range of measures of domestically-generated inflation in the UK fell from around 2% to ½% at the end of 2014 – it has since recovered but only to nearly 1½% which is considerably below its pre-crisis average of 2½%. Over the same period, pay increases averaged around 2% – despite the fastest drop in unemployment in 40 years. Output growth picked up briefly to over 3% but has now fallen back to nearer 2%. And a small output gap probably persisted over the period. The MPC’s 2% inflation target is for UK CPI as a whole not for domestically generated inflation. But if we want to get a cross-check on where monetary policy was relative to where the natural rate might have been over this period, we can observe that monetary policy was not able to get domestically generated inflation to the inflation target over the policy horizon. In other words, far from being exceptionally loose, policy with hindsight may even have been a little tight. If this is right and the natural rate is currently slightly negative, how can that low level be explained? The great shocks that hit the economy after the crisis have surely dissipated. What are the headwinds now pushing the natural rate down? There are I think three interesting candidate explanations for this.
Deliver the right message at the right time. 18. Third, we will provide more avenues for people who are in difficulty or financial distress, to seek help. We must do everything we can to prevent people from getting into a worse situation, or getting into a debt spiral. CCS, with the help of ABS, runs a very useful debt management programme for those who cannot re-pay their borrowings from banks. We can do more, using our social workers and counsellors. 19. MoneySENSE, through the new institute that I talked about, the Institute of Financial Literacy, is now conducting a pilot training programme to help social workers and counsellors, to equip them with financial literacy knowledge so they can provide advice to low income households, or those who come and see them for help. It may have to do with cutting down on utility bills, or it may be about spending wisely in weekly marketing, without compromising on health and wellbeing. 20. MoneySENSE will continue working with the social service sector with the objective of training social workers and counsellors, so they can expand our outreach to Singaporeans. BIS central bankers’ speeches  3  Conclusion 21. This is what we plan to do for the future. I think we have done good work for the first ten years, but there is a lot more work ahead to help Singaporeans.