The Rt Hon Sir Edward George GBE: New economy - same old problems  Speech by The Rt Hon Sir Edward George GBE, Governor of the Bank of England, at the CBI National Conference, held in Birmingham, on 7 November 2000. *  *  *  Thank you, Mr President. I’m honoured to have been invited back to address your annual conference. I remember very vividly my earlier visit to your conference in 1996. I remember reporting to you that the British economy was then into its fifth consecutive year - its nineteenth consecutive quarter - of relatively steady growth at an annual average rate of 2.6%; that unemployment had fallen, pretty well month by month for most of that time, to below 7½%; and that inflation had averaged 2¾% over the previous four years - compared with over 10% on average in the preceding two decades. The question then was could we keep up - or even improve upon - that performance. And my answer was a cautious yes - provided we met three conditions: a continuing firm grip on inflation; continuing prudent and sustainable fiscal policy; and continuing structural, supply-side flexibility. Well, that cautious optimism was amply justified.
Today, we are well into our ninth consecutive year our thirty-third consecutive quarter of relatively steady growth (despite having to absorb the global emerging markets financial shock of a couple of years ago) at an annual average rate of 2.8%; the number of people in employment has risen to an all-time high; the rate of unemployment, on a claimant count basis, has fallen to 3.6%, which is the lowest rate for 25 years for the UK as a whole and the lowest rate for 20 years in every individual region of the UK; and retail price inflation on the target RPIX measure has now averaged 2.7% over the past eight years, and on the standardised HICP measure is currently the lowest rate in Europe. And if you ask me today the same question - can we keep up that performance, my answer is still a cautious yes - on the same three conditions - low and stable inflation, fiscal prudence and supply-side flexibility. Now I am very well aware that some of you - perhaps many of you - thinking of your own businesses may conclude that I’m living on a different planet.