if emu goes ahead, whether or not the uk is a part of it, it is clearly in our interest that it should succeed. on that basis, the euro - area would have no reason - - and certainly no right under european legislation - - to seek to act in any discriminatory way. indeed, it would be economically damaging to both sides if it were to do so. i have no serious concerns on this score. assuming, as i do, a continuing responsible and constructive relationship - - which, as i say, would clearly be in our mutual interest - - it seems to me that some of the concerns that are occasionally expressed, for example, about the possible loss to the uk of internationally mobile investment, are exaggerated. i would suppose that, in the future as in the past, investment will be located wherever it is expected to earn the highest return - - indeed i would suppose that shareholders would insist that this be the case. and while exchange rate uncertainty may be a factor in such decisions, it is not at all clear that it is likely to be the decisive factor very often, when set, for example, against the whole range of supply - side influences, including labour market flexibility. similarly, in relation to concerns about the future of the huge uk financial services industry, the reality is that financial activity will be carried on wherever it can be carried on most conveniently, efficiently and profitably. and in this case, too, the question of whether or not the uk is part of the single currency is unlikely to be decisive. the city of london thrives on broad, liquid markets regardless of currency, and provided we are prepared - - as we will be from 1 january, 1999 - to quote, trade and settle in euro, as we are now in dollars or yen or dm, then i am convinced that the broader markets in euro instruments will represent an opportunity rather than a threat to the city. the fact is that overseas - controlled financial institutions are continuing actively to build their presence in the city, notwithstanding expectations that the uk will not be among the initial euro - member countries - - and this suggests very strongly that they take the same view about the city ’ s future. i am quite confident that here in hong kong you will continue to be able to conduct your european financial business in euro in london, just as you do now in dm and french francs. so now then, mr chairman, should i answer the question in my title? one euro -

getting over covid speech given by andrew bailey governor of the bank of england resolution foundation 8 march 2021 i am grateful to lauren barnes, john barrdear, philip bunn, andy haldane, jonathan haskel, karen jude, david latto, clare macallan, nick mclaren, marko melolinna, sophie piton, alex rattan, kate reinold, michael saunders, fergal shortall, brad speigner, silvana tenreyro, matt tong, jan vlieghe, and chris young for their assistance in helping me prepare these remarks. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice introduction it ’ s a great pleasure to be participating in a resolution foundation event today. i wish i could say what a pleasure it is to be at the foundation, but that has to remain a hope for the future. i am going to talk today about the future, the post covid future as the economy recovers from this traumatic experience. if i had to summarise the diagnosis, it ’ s positive but with large doses of cautionary realism. to summarise, after starting with some description and assessment of the covid shock to the economy, i am going to draw out four important points : covid has been both a demand and supply shock to the economy, and the recovery therefore has to be in both elements, unusually so for recoveries i think. absent a dual recovery, dealing with the issues that arise will be more difficult. second, there are reasons to believe that so - called longer - term scarring damage to the economy will be more limited than in some past recessions, but there will most likely be structural change which will influence the future of supply and demand. third, it is important to boost supply capacity to raise the sustainable rate of growth in the economy and thereby ease the task of managing the necessarily higher level of public and corporate sector debt. and fourth, taking all of this together, and consistent with the current setting of monetary policy and the outlook for the economy as set out in the february monetary policy report, it is important to emphasise the role of the forward guidance that the mpc has adopted, and the announcements made a month ago on so - called toolbox issues. the covid economy the economic impact of covid has in aggregate been very large. we expect that by the end of the first