Chart 8 shows the correlation between UK forward interest rates and the UK and US data surprise series that I described earlier, split by time period. That the responsiveness of forward interest rates to data news was particularly low during the 2009–April 2013 period is not surprising as Bank Rate was constrained on the downside by the zero lower bound, so that the distribution of policy rates was truncated. That is still relevant today, but economic news has been more consistently to the upside recently, attenuating the impact of the constraint. Importantly, there is some evidence that the response of UK rates to US data surprises has declined since the introduction of the MPC’s forward guidance, although the small sample in the most recent period means that the coefficients are not that precisely estimated. A final piece of evidence, which is at least consistent with the central aim of the MPC’s guidance, is presented in my final chart. As I noted earlier, a prime concern was to convey the message that a return to growth did not imply an early withdrawal of stimulus. Rather, if slack was substantial, then it should be possible to maintain the highly stimulatory monetary stance for some while before price stability – as embodied in the inflation target – is threatened. Historically, and particularly in the pre-crisis period, there was a reasonably strong correlation between indicators of growth and the slope of the yield curve at the short end.
As experience with gender and ethnicity illustrates, measurement and, ultimately, publication of diversity metrics can be important first steps towards creating a more socio-economically and cognitively diverse workforce. Metrics hold a mirror up to us all. Sometimes that casts a reflection none of us much like – a reflection that then prompts us to do better. And the measurement task is far from impossible. Simple metrics of socio-economic background already exist, however imperfect, and are being used in some organisations to help recruitment. Psychometric and neuroscientific tests are being developed at pace which help paint a picture – sometimes quite literally, through MRI scans – of an individual’s cognitive skills. In this respect, I applaud the Diversity Project’s intention to develop multiple metrics of diversity and to share this information among its membership. Third, recruitment. The filters applied in many of our standard recruitment procedures are, to my mind, a big barrier to building a diverse workforce. Filters such as academic prowess (grades at school and university), work experience (internships and voluntary activities) and social skills (team-building and networking) are standard recruitment filters and sound perfectly sensible. Yet these filters may, inadvertently but unhelpfully, disadvantage certain cohorts of society. Those whose parental incomes, and hence school choice, may have held back their academic scores and work experience opportunities. Those whose personality-type or brain circuitry means they are not as socially skilled or who dread interviews or team interactions. Let me take a specific example - autism.