These expectations have clearly had an impact on the exchange rate with all that implies for output and inflation and for the exceptional circumstances trade off faced by the MPC that I have described earlier. And though it is more difficult to measure, these expectations are affecting to some degree many of the economic decisions of businesses and households. The full and diverse range of expectations of Brexit and of the path to it cannot by definition all come to pass. Over our forecast period, a specific Brexit and a specific path to it will emerge. The MPC cannot forecast what that outcome will be or how it will measure against the diverse expectations in and between households, businesses and financial markets. Nor can the MPC forecast how that outcome will affect the adjustment of the paths of demand, supply and the exchange rate, relative to each other. It is that relative adjustment of these variables that will determine the path of inflation and hence whether – and in which direction – policy may need to respond to meet the Committee’s primary objective. We can, in my view, only work on what we see in the economy now and stand ready to respond as necessary as Brexit emerges. Conclusion  Monetary policy makers complaining about uncertainty is a bit like sailors complaining about the sea. Uncertainty is not a reason for inaction. Economic data are never clear. Economies are adaptable organisms that are always evolving.
1-17 Haldane, Andrew G. (2017) ‘Work, Wages and Monetary Policy’ speech given at the National Science and Media Museum, Bradford IMF (2013) ‘The dog that didn’t bark: has inflation been muzzled or was it just sleeping?’ April World Economic Outlook, Chapter 3 Mishkin, Frederic (2007) ‘Inflation Dynamics’ NBER working paper 13147 Nagel, S and Malmendier, U (2011) 'Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?’ Quarterly Journal of Economics, Vol126(1), pp373-416 Phillips, A W (1958) ‘The relation between unemployment and the rate of change of money wage rates in the United Kingdom, 1861–1957’ Economica, Vol. 25, No. 100, p. 283–99 Pizzinelli, Carlo and Bradley Speigner (2017) ‘Matching Efficiency and Labour Market Heterogeneity in the United Kingdom’ Bank of England Working Paper No. 667 Saunders, Michael (2017) ‘The Labour Market’ speech given at the Resolution Foundation, London Stiglitz, Joseph (1997) 'Reflections on the natural rate hypothesis' Journal of Economic Perspectives, 11, 3–10 Yellen, Janet (2017) ‘Inflation, Uncertainty and Monetary Policy’ Speech at the "Prospects for Growth: Reassessing the Fundamentals" 59th Annual Meeting of the National Association for Business Economics, Cleveland, Ohio  18  All speeches are available online at www.bankofengland.co.uk/speeches  18