Against this background, we emphasise that maintaining price stability in the medium term is our primary objective in accordance with our mandate. The firm anchoring of medium to longer-term inflation expectations is of the highest priority. The Governing Council remains strongly committed to preventing second-round effects and the materialisation of upside risks to price stability over the medium term. We believe that the current monetary policy stance will contribute to achieving our objective. We will continue to monitor very closely all developments over the coming weeks. Allow me to explain our assessment in greater detail, starting with the economic analysis. The latest data and survey information on economic activity confirm previous expectations of moderate but ongoing growth in the first half of 2008. In particular, industrial production data for the first months of the year showed resilience, while economic sentiment generally continued to soften. Overall, the euro area economy has sound fundamentals and does not suffer from major imbalances. In line with available forecasts, both domestic and foreign demand are expected to support ongoing real GDP growth in the euro area in 2008, albeit to a lesser extent than during 2007. While moderating, growth in the world economy is expected to remain resilient, benefiting in particular from strong growth in emerging economies. This should continue to support euro area external demand. Meanwhile, investment growth in the euro area should provide ongoing support to economic activity, as capacity utilisation remains solid and profitability in the non-financial corporate sector has been sustained.

Seizing the full potential of market-based finance requires the right soft and hard infrastructure for continually open markets. Hard infrastructure like resilient CCPs. Soft infrastructure like the regulation the liquidity management of funds that offer daily liquidity while investing in highly illiquid underlying assets. In particular, it requires hard infrastructure like a robust Bank of England balance sheet that can support the banking system and the broader system of market-based finance. The Bank’s new approach can be summarised in four words: we’re open for business. We now provide liquidity against a wider range of collateral, to a wider range of counterparties, for longer terms, and at lower fees than ever before. And we stand ready to provide liquidity in a range of foreign currencies if required. 13  The financial sector supporters included 20 globally-systemic banks, 8 of the top 10 global asset managers, the world’s leading pension funds and insurers, the largest sovereign wealth fund and the two dominant shareholder advisory service companies. 14 See ‘[De]Globalisation and Inflation’, 2017 IMF Michel Camdessus Central Banking Lecture given by Mark Carney, and Rachel, L and Smith, T (2015), ‘Secular drivers of the global real interest rate’, Bank of England Working Paper No. 571. For a contrary take, see Goodhart, C and Pradhan, M, (2017), ‘Demographics will reverse three multi-decade global trends’, BIS Working Papers No. 656. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  This new approach was tested during the EU referendum. It passed.