I regret to say that the present Governor neither has the power to command a private railway station nor would he know where to put it if he did. My Lord Mayor, you will see that there are indeed many challenges for economic policy. We have to pass through turbulent waters. But we have set the right course. There is an appropriate policy mix to rebalance the UK economy and reach a new equilibrium. With the Financial Policy Committee there is a new body responsible for monitoring and, more importantly, responding to risks to the financial system as a whole. And a new approach to prudential supervision will be implemented by the Prudential Regulation Authority. If we stick to this course, adjusting the tiller in response to changing conditions, I am confident that we shall return to both price and financial stability. Lord Mayor, all of us here tonight would like to pay tribute to your charitable work since you became Lord Mayor. Your personal involvement in the regeneration of Spitalfields, and the Lord Mayor’s Appeal in support of disaster relief and to help children and young people in need, are a demonstration of the charitable instincts of the City of London. We salute you for that leadership, and I am sure that everyone here tonight thanks both you and the Lady Mayoress for the splendid hospitality which you have extended to us all this evening.
There are no guaranties that levels of income in the CESEE countries are going to converge towards those of the developed Western economies. No guarantees that these countries are not going to form one, or more, of the so-called convergence clubs at a lower level of per capita income compared to their developed peers. However, it is our job to dare to introduce reforms even if we are not a 100 percent sure about the timing and the scale of the effects, as these are often not under our direct control. But if history teaches us anything, and if we follow the best practices from around the world, not only the EU, then the path we have to follow becomes much clearer. And the closest thing to a recipe for reducing the probability of being caught in the middle income trap (of low growth and slow or no convergence) would be to dare to reform. Be it the education system with an aim to increase the quality of human capital, be it liberalising product and labour markets controls, be it the reform of justice or public administrations systems, or anything else that is proven to enhance the business environment in the country. It is as simple or as difficult as that. But, and this is my final thought – we have to keep in mind the political economy dimension of the process, and there things do not look encouraging.