Unemployment has fallen by over 900,000 since its peak and 770,000 new jobs have been created. My overriding aim is to ensure living standards continue to rise and more jobs are created in the medium-term. This means we must take no risks with inflation now or in the future. Revised GDP data show that growth was close to trend during the first half of the year. All the indications are that output has accelerated since then, with provisional data for GDP showing growth of 0.8 per cent in the third quarter.
Inflation remains subdued with cost pressures still weak.
Experience has shown that by increasing rates early, as I did in 1994 and I am doing today, possible inflation can be nipped in the bud. This is the action of a government prepared to take the right economic decisions to maintain economic recovery for the years ahead.