But the MPC was conscious of the risk of misinterpretation, so the transition was made gradually – with the Governor reflecting on the market curve in his remarks at the February and May Inflation Report press conferences, and the MPC referring to the market curve in the minutes during the spring. By the time the switch was introduced in the August Inflation Report, MPC and markets understood the nature of the conditioning assumption, and the change itself was seen as the marginal improvement that it is. 16  See Inflation Report August 2004 pp 42-43. 17  Bean, C (2004) ‘Some current issues in UK Monetary Policy’ Bank of England Quarterly Bulletin Autumn 2004. 18  For further details on this issue see Brooke, M, Cooper, N and Scholtes, C (2000) ‘Inferring market interest rates from money market rates’ Bank of England Quarterly Bulletin November 2000. For further information and data, please see the Bank of England website www.bankofengland.co.uk. BIS Review 17/2005  9  Chart 4. Market beliefs about future interest rates – Inflation Report February 2005  Different inflation targeting central banks have evolved their own ways of communicating. At one extreme, the Governor of the Reserve Bank of New Zealand publishes his own forecast of future interest rates – though he is the sole decision taker in that regime.
There are promising signs, among business and regulatory sectors, that there is a growing space for captives to play a role. It is important that we move forward to harness this potential, responsibly and thoughtfully. 4/4  BIS central bankers' speeches