Uncertain times Speech given by Ben Broadbent, Deputy Governor Monetary Policy, Bank of England  At the Wall Street Journal, The News Building, London 5 October 2016  I would like to thank my fellow MPC members and other Bank colleagues for their helpful comments. The views expressed are my own and do not necessarily reflect those of the Bank of England or other members of the Monetary Policy Committee. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Before August, the UK’s official interest rate had been held at ½% for over seven years, the longest period of unchanged rates since 1950. No-one on the current MPC was on the Committee when rates were previously changed, in early 2009; indeed there are children now at primary school who weren’t even alive at the time. So although the August Inflation Report gave a pretty full account of the reasons for the MPC’s decision it wouldn’t do any harm to expand on these things a little further. That’s what I plan to do today, focussing on two areas. The first involves one of the main reasons for the revised – and weaker – economic projections we made in the August Inflation Report and the policy easing that accompanied it. This was not a judgement about the ultimate economic effects of the UK’s exit from the EU, not least because we are unlikely to know, for quite some time, what that will entail.
But what is driving the growth of London in particular? One approach to this question is to ask executives in major financial companies, both in the UK and abroad, why they choose to locate business here. A number of these surveys have been conducted recently and they show several common factors. 11 London benefits from English as an international language of commerce, and from its time zone, which means the working day overlaps with Asia in the morning and America in the afternoon. London also has well established financial infrastructure and telecommunication networks. Many of those surveyed point to the regulatory and legal environment. This is partly a matter of the regulatory style – the “risk based and proportionate” approach that the Financial Services Authority has adopted based on general principles where possible. It is partly the simplicity of dealing with a single regulator. 10  Caballero, R. “On the macroeconomics of asset shortages” NBER WP 12753, December 2006. 11  For example, Cook, G. A. S., Pandit, N. R., Beaverstock, J. V., Taylor, P. J. and Pain, K. (forthcoming in 2007). “The role of location in knowledge creation and diffusion: Evidence of centripetal and centrifugal forces in the City of London financial services agglomeration”. Environment and Planning A. 4  BIS Review 29/2007  English law, which is also the basis for financial services law in the United States, prevails here, with the added advantage that practitioners are less likely actually to invoke the legal system.