While those who say it is not an important source of uncertainty fell from 23% to 13% over the same period. Brexit has an important bearing on the Bank’s pursuit of monetary and financial stability, and it is taking steps to help ensure the necessary adjustment is as smooth as it can be. The Prudential Regulation Authority is engaging proactively and intensively with banks and insurers to ensure their plans are robust to the full range of potential outcomes. The FPC is focussed on its statutory responsibility of identifying and monitoring and taking action to reduce risks. The MPC’s focus has been on balancing the trade-off, as required by its remit, between the speed at which inflation returns to target, and the support that monetary policy provides to jobs and activity during the adjustment process. In the Markets and Banking areas of the Bank, for which I have direct responsibility, we are undertaking a series of initiatives which, although not directly related to Brexit,  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  will help ensure stability, improve effectiveness and enable innovation in key parts of the UK’s financial system through this period of challenges and opportunities. It is the work of the MPC and of the Markets and Banking areas that I would like to focus on today. In particular the role they play in ‘end to end’ monetary policy, which for the purposes of this lecture I will split into three phases: Define, Decide, and Deliver.
Of course we didn’t have Brexit in mind when updating the Remit in 2013, nevertheless the Bank headed into the EU referendum last year with arguably the most clearly defined objective for monetary policy in its 323 year history. And it has been the foundation of the framework the MPC has used to set monetary policy since the referendum result. Although I only joined the Committee in September, the analytical approach in the framework is one that I fully sign up to. So I would like to spend a minute setting it out. Fundamental to the way in which the MPC has reacted to Brexit is that monetary policy cannot prevent either the necessary adjustment – such as that implied by the movement of the exchange rate - as the UK moves towards its new international trading arrangements, or the weaker income growth that is likely to accompany it. These are real phenomena likely to play out over many years – exactly the kind of thing that monetary policy cannot affect, no matter how often it is asked by some commentators to do so. What the MPC can do is support the economy during the adjustment process. But even in doing that the Committee has faced a trade-off between stabilising inflation on the one hand and output and employment on the other.