##andemic level on a sustained basis, the uk economy has shown unexpected 1 / 7 bis - central bankers'speeches resilience in other ways in the face of these substantial – in some cases unprecedented – external shocks. unemployment is at 3. 8 %, right at the bottom end of experience in modern times, and the economy has avoided a recession thus far. this is a good thing in many ways. no one wishes to see unemployment higher or growth weaker. but the interaction of above - target headline inflation with labour market tightness and demand pressure in the economy has made underlying developments in goods and services price inflation more sticky than previously expected. both price and wage increases at current rates are not consistent with the inflation target. in the face of these inflationary pressures, monetary policy has been tightened. over the last twenty months, we have raised bank rate by nearly five percentage points. some of that tightening is still to come through the policy pipeline, and we expect underlying inflationary pressures to recede as headline inflation falls. but the monetary policy committee is monitoring developments – in particular, those in the labour market, in wage growth and in services price inflation – to assess whether pressures are proving more persistent. to draw on kierkegaard, we make our decisions drawing on the evidence we have as a guide to the future. at the last mpc meeting, that pointed to the need for further policy tightening. we are about to draw that evidence together again, as we do around every six weeks. it is crucial that we see the job through, meet our mandate to return inflation to its 2 % target, and provide the environment of price stability in which the uk economy can thrive. this is the best contribution monetary policy can make to the prosperity of the united kingdom. returning inflation to target is so important, not least because people should trust that their hard - earned money maintains its value. while that is our pre - occupation at the moment, living forwards in a time of technological innovation also means that we need to secure the value of money in a different way. the future of money is the subject for the rest of my time. i am going to start by setting out two important foundations of safe money, on which the economy depends and in which the public can trust. these may sound obscure, but they're fundamental. the first is called the'singleness of money'while the second goes under the term'finality of settlement '. together, these two ensure things happen

andrew bailey : new prospects for money speech by mr andrew bailey, governor of the bank of england, given at the bank of england, london, 10 july 2023. * * * i want to start by welcoming the chancellor's announcements this evening aimed firmly at encouraging investment in the productive economy. since the financial crisis fifteen years ago we have seen potential output growth fall in many economies, the uk included. a sustained and robust improvement of the supply side of the economy is the only means to raise productivity and thereby the standard of living in a way that lasts the test of time. in pursuing supply side improvements, we must also respond to recent events in a way that recognises the need to diversify our supply chains and make them more robust, but achieves diversification without abandoning open and competitive markets and free trade. we will get the best outcomes by pushing back against economic and financial fragmentation. i spend time meeting businesses with the bank's network of agents around the uk, and i am left in no doubt that there are many opportunities for successful long - term investment, and that we must take up these if we are to respond to challenges and opportunities such as the transition to net zero, digitalisation and artificial intelligence. but as you will understand, my pre - occupation at the moment is inflation. currently at 8. 7 % in the latest data, consumer price inflation is unacceptably high, and we must bring it down to the 2 % target. the uk is not alone in this. there is currently a popular saying among central bankers, from the danish philosopher soren kierkegaard, which, to paraphrase slightly, is that life can only be understood backwards ; but it must be lived forwards. this is an important lesson as we do what is necessary to bring inflation back to target. looking back at all that has happened in recent years, the uk economy has been hit by a series of external inflationary shocks : higher goods prices in global markets owing to supply bottlenecks created by the pandemic ; and higher energy and food prices following from russia's war on ukraine and its people. looking ahead, uk headline inflation is set to fall markedly over the remainder of the year. this largely owes to lower energy prices as last year's substantial increases drop out of the annual calculation. food prices should fall too as lower commodity prices feed through to prices in the shops. however, while the level of economic activity has failed to grow beyond its prep