The MPC has set out forward guidance that it does not intend to tighten monetary policy at least until there is clear evidence of significant progress being made in eliminating spare capacity and achieving the 2% inflation target sustainably. As time passes and the economy recovers the forward guidance will become more salient, providing reassurance that there is a high bar to any future tightening. Figure 9: February 2021 Monetary Policy Report GDP projection, based on market interest rate expectations £ bn, 2018 prices 640 Projection  620 600  580 ONS data  560 540 520 500 480 460  440 420 2016  2017  2018  2019  2020  2021  2022  2023  400 2024  Source: February 2021 Monetary Policy Report. Conclusion  In conclusion, my view as I have set out in this third Peter Sinclair Town Hall lecture, is that QE is a policy tool that has worked: it has proved its worth in the policy response to the Global Financial Crisis and more recently in the response to the ongoing Covid crisis. Over the past twelve years, QE has meant an expanded role for the central bank balance sheet as a key feature of what Peter termed “the new normal” for monetary policy. Of course, public scrutiny and debate about the role of QE is also valid – it is a relatively new tool about which we still have much to learn.
But I do not expect to see too many destitute foreign exchange traders miserably wandering the streets in search of charity or menial employment because of course, as trading amongst the EMU currencies disappears, new international trading is developing in a range of currencies of leading emerging market economies. But more importantly, the advent of the euro will usher in potentially much deeper markets than exist in the individual national centres at present in a range of different money market instruments -- short-dated government and/or central bank paper, commercial bills, CDs, inter-bank deposits, commercial paper, repos, interest-rate futures, swaps, FRAs, options and a miscellany of tailor-made variants on these basic products. Markets in these products are of very varying depth and liquidity, where they exist at all, in the individual local-currency markets of the countries likely to participate in EMU. But all of these instruments are, as it happens, traded in London in the main international currencies; and with the advent of the euro, all of them will also, for the first time, be traded in the major European currency. This represents a tremendous business opportunity for banks and financial institutions with the capacity to trade these instruments and to harness them to the needs of their customers. 34. But there is a third impact on financial markets from the euro that is essentially a necessary prerequisite that must be fulfilled if the benefits from integration of the bond and money markets that I have identified are to be achieved.