Given the uncertainties, it should not surprise you that the Committee members disagree more often than not, but usually at the margin, on what should happen in any particular month to interest rates. I regard that as a strength rather than a weakness of the process. It should not surprise you either that even though we consistently aim to hit the target, we rarely achieve it precisely. As a matter of fact, I have been genuinely, and agreeably, surprised that the outcome over the past few years has been as consistently close to the target as it has been. The best we can realistically hope for is that we come close on average and over time. And to achieve that, when we identify developments which are likely to move us away from our target on one side or the other, we must be ready symmetrically to adjust our policy to bring us back on track. That is why, even though the economy as a whole continues to perform relatively well on the data, we have moved interest rates downwards this year, to reflect the emergence of the new downside risks; and it is also why we indicated, in our recent press release, that we will continue to monitor those downside risks. That is not a promise of further interest rate reductions, but it is a promise that we are prepared to move further if we have evidence that those risks are increasing.
The Rt Hon Sir Edward George GBE: Macro-economic management in the UK Speech by The Rt Hon Sir Edward George, Governor of the Bank of England, at the 2001 Institute of Directors Convention, London, on 25 April 2001. *  *  *  The theme of your convention is change - and as a general observation what's always struck me about change is that it's not simply a one-off event - a discrete step from A to B. Change is a continuing process - and once you've embarked upon that process it's not always clear where it will lead. You either embrace the process, notwithstanding the uncertainty, it seems to me, or you resist it, with the risk then that the world changes around you and begins to pass you by. What is certainly true - in this country but much more widely internationally - is that there has gradually over a long period been a very profound change in the approach to overall economic management. For a long period after World War II the emphasis of macro-economic policy seemed to concentrate on aggregate demand management, with too little attention paid to the constraints imposed by the supply-side capacity of the economy to meet that demand. When growth and employment were judged to be insufficient, monetary and overall fiscal policy were used in combination to provide a stimulus to the economy, often supported by direct controls of one kind or another to suppress the emerging symptoms of increasing pressure on resources.