huw pill : monetary policy - an anchor in challenging times speech by mr huw pill, chief economist and executive director for monetary analysis of the bank of england, at the scottish council for development and industry, glasgow, 12 october 2022. * * * good afternoon everyone. it is a great pleasure to be with you in glasgow today. my thanks to the scottish council for development and industry for their invitation to speak, to the university of strathclyde for hosting us, and of course to all of you for taking the time to attend. i am looking forward to our discussion. i have spent the past couple of days here in scotland talking with firms, speaking to business leaders and engaging with our citizens panel. as you can imagine, some of those discussions have been challenging. we are living through challenging times. the invasion of ukraine has led to a dramatic rise in european wholesale gas prices. household incomes are being squeezed by higher energy bills. company profits are being squeezed by higher energy costs. and headline inflation has risen to unacceptably high levels. for a net importer of energy like the uk, the rise in global energy prices weighs on national income : the cost of what we are buying from the rest of the world has risen dramatically relative to the price of what we are selling. you don't need to be an economist to understand the implications of this for domestic demand. higher energy prices dampen household spending, and weigh on economic activity. on top of all this, the strength of the labour market has pushed up costs through wage inflation. and recently we have seen greater volatility in financial markets : both globally and, with particular force, here in the uk. that has intensified in some market segments over recent days. as someone who joined the bank's monetary policy committee ( mpc ) just over a year ago, it has certainly been something of a baptism of fire. more profoundly, the past year has been difficult for all of us. compared with twelve months ago : household utility bills are much higher than expected ; the prospect of higher mortgage payments looms larger ; and the outlook for economic activity looks weaker. none of this is good news. but, there is at least one constant in the face of all these challenges. the mpc remains fully committed to delivering on its mandate – to maintain price stability – by fulfilling its remit – to return inflation to the 2 % target. despite difficult circumstances, that commitment is unwavering. monetary policy

mervyn king : monetary policy developments speech by mr mervyn king, governor of the bank of england, to the institute of directors, st george ’ s hall, liverpool, 18 october 2011. * * * mr chairman, ladies and gentlemen, surrounded by the magnificent architecture of st george ’ s hall, we are reminded of the benefits and the costs of exposure to the world economy. built at the peak of liverpool ’ s mercantile fortunes, the hall, and the other magnificent buildings of the cultural quarter, exhibit the prosperity derived from openness to trade. indeed, tonight is the anniversary of a grand banquet held here on 18th october 1860 to celebrate the opening of the public library and museum building that stands opposite. its construction had been financed by the guest of honour at the banquet that evening, william brown, whose statue stands in the hall today. brown had profited from transatlantic trade both as a merchant and by establishing a bank which financed trade – at the time a risky business. in those days, finance and trade supported each other, and the city prospered. but the subsequent history of st george ’ s hall, which fell into neglect in the last century, illustrates liverpool ’ s vulnerability to changes in the rest of the world. the british economy too has enjoyed the benefits of globalisation. now we are seeing some of the costs, as they play out in a global financial crisis. as a country, we are trying to rebalance our economy at a time when a global slowdown, and concerns about the solvency of european banks and sovereigns, threaten recovery here in the united kingdom. two weeks ago, the monetary policy committee ( mpc ) decided to resume its asset purchase programme and create new money. before i set out the reasons for that decision, i want to explain why the global nature of the crisis means that monetary and fiscal policy in the united kingdom can only do so much. our fate rests to a considerable extent on the policies pursued by our trading partners. that is why the chancellor and i put such weight on this interdependence among the major economies at last weekend ’ s g20 meetings in paris. countries have responsibilities to each other, and we need to work with our partners overseas to find a solution to present problems. four years into the crisis it is surely time to accept that the underlying problem is one of solvency not liquidity – solvency of banks and solvency of countries. of course, the provision of additional liquidity support to countries