The Rt Hon Sir Edward George: Turandot - an allegory about the state of the global economy Speech by The Rt Hon Sir Edward George, Governor of the Bank of England, at the Association of Corporate Treasurers Annual Dinner, London, 13 November 2002. *  *  *  This time of the year - between the end of summer holidays and Christmas - is always a particularly busy time for me: it's the season of annual dinners and international meetings. This year it's been even more hectic than usual. And it's been a particularly gloomy period - characterised by global economic uncertainty, financial market volatility and a pervasive sense of pessimism in business and financial circles, not to mention of course the media. That won't have escaped the notice of most of you here. So, in the middle of it all, I took time out a few weeks ago to go to Covent Garden to see one of my favourite operas - Turandot. And I thought it might be more agreeable for all of us if I talked about the opera this evening, rather than the prospect for interest rates. I'm sure you all know the story. The beautiful, but somewhat frigid, Princess Turandot decided to set her many suitors three tests. Turandot's tests were in the form of riddles - and she would only marry the man who could solve all three riddles correctly.
Disappointingly, Turandot's answer to the flickering flame was not "confidence" as I had thought it would be. Her rather chilling answer was BLOOD - which could no doubt flow if confidence were to fail. But you have to remember that I was watching the opera over a month ago. Perhaps today she would come up with a somewhat more positive answer. Turandot's third riddle was "What is the frost that burns…… and makes a king of the one it accepts as a slave?" Well for a time that stumped me completely! Not that it mattered much by then - I'd already failed the first two of Turandot's tests, so I knew I was for the chop anyway! But then I began to reflect on the implications of it all for our own economy here in the UK. And I even recalled that previous occasion on which I had dined with you here at the ACT dinner. At that time we'd had just 2½ years of growth with low inflation - after the 1990/91 recession. I told you that we were determined to maintain price stability as a necessary condition for sustainable growth of output and employment. You all hooted with laughter! Your President said it had been the best joke of the evening - even though you'd heard it many times before! Well we've now had 10 years of low inflation - with continuous, quarter-by-quarter, GDP growth, and the number of people in employment is at a near-all-time high.