3  3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  Table 2: Islamic finance in the UK – selected timeline 1970's  London market brokers offer wholesale liquidity management using commodities  1982  Swiss-based Dar al Mal al Islami opens London office offering investment management services Establishment of first Islamic bank, Albaraka Bank (ceased 1993)  1983  Establishment of first UK Islamic insurance (takaful) company, Takaful UK Ltd 1996  Islamic mortgages offered in the UK by United Bank of Kuwait (now Ahli United Bank)  2003  HSBC Amanah launches Islamic mortgages and bank accounts in the UK  2004  Authorisation of Al Rayan Bank Plc (formerly Islamic Bank of Britain) Court case of Beximco vs. Shamil Bank of Bahrain establishes principle that secular authorities cannot opine on Shari'ah compliance Bank ABC offers Islamic mortgages under Al Buraq brand  2005  Children's Mutual launches Shari'ah compliant Child Trust Fund Lloyds TSB offers Shari'ah compliant current account  2006  Authorisation of European Islamic Investment Bank Plc (ceased in 2018) First sukuk listed on the London Stock Exchange (Tabreed, $  2007  Authorisation of Bank of London and the Middle East Plc Authorisation of investment firm Amiri Capital (ceased 2018)  2008  FSA outlines regulatory approach to Islamic finance in: "Islamic finance in the UK: regulation and challenges" Authorisation of QIB (UK) Ltd (formerly European Finance House) Authorisation of Gatehouse Bank Plc Authorisation of British Islamic Insurance Holdings/Principle Insurance (ceased 2013) Consultation paper CP08/22 establishes liquid asset buffer requirement for all UK banks  2012  Authorisation of ADIB (UK) Ltd (ceased 2020) HSBC Amanah exits UK market  2013  Authorisation of Cobalt Underwriting London hosts the World Islamic Economic Forum, the first time outside the Muslim world  2014  UK Government issues its first sovereign sukuk Authorisation of Investment firm Arabesque Asset Management TAM Asset Management launches Shari'ah compliant investment funds  2015  Islamic Insurance Association of London established Bank of England commences Shari'ah compliant facilities (SCF) project  2017  Authorisation of Shari'ah compliant crowd funding firm Yielders Columbia Threadneedle Investments launches Shari'ah compliant global equity fund Authorisation of Shari'ah compliant home finance firm Strideup Homes  2018  Al Rayan Bank issues first sterling denominated residential mortgage backed sukuk  2019  Registration of PrimaDollar Factoring, Shari'ah compliant trade finance firm  2020  Authorisation of Investment firm Wahed Invest Registration of several Shari'ah compliant e-money and payment services firms and agents, including: Niyah, Moneemint, Rizq  2021  Planned launch of the Bank of England's Alternative Liquidity Facility (ALF)  Sources: Bank internal analysis and FCA Register  4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  I am proud to say that the Bank of England has been involved throughout those developments.

In regard to inflation, after a period in which inflation was below the levels the Fed judges to be most consistent with its statutory objectives, on a year-over-year basis, headline CPI (consumer price index) has increased more than 3 percent, which is somewhat above this desired level. The rise in commodity prices over the past year probably will push up headline  BIS central bankers’ speeches  3  inflation further in the next few months. It is noteworthy, however, that even with the sharp rise in oil and food prices over the past year (and notwithstanding the more recent drops), there has been limited pass-through into the prices of other goods and services. In fact, most measures of underlying inflation trends – such as core inflation (which excludes volatile food and energy prices) – remain below levels consistent with our mandate for price stability. Going forward, futures markets do not signal that investors expect rapid ongoing increases in commodity prices from current levels. Provided these prices stabilize (or indeed retreat further), I would expect headline inflation to move back to a more mandate-consistent rate. While this process plays out, however, it is critical that we ensure that inflation expectations do not become unmoored. It is much harder to keep inflation in check if people begin to raise their expectations of inflation. At this point, measures of inflation expectations overall remain stable. Economists at the New York Fed have examined inflation expectations using a unique survey that we sponsor.