we can because of the length of time it takes for monetary policy changes to have their full effect. our task would be far less challenging if we could predict the future with great confidence. the point i want to emphasise is that monetary policy is in the end an art rather than a precise science, no matter how much science we try to bring to bear on the process. but in looking ahead each member of the mpc has to try to distinguish between what we actually know, what we think is the most likely outcome, and what we fear could happen - we cannot simply act on a hunch. we then have to watch the evolving situation measured against our central expectation for signs that prospective inflationary pressures are proving to be either weaker or stronger than we had, individually, anticipated, adjusting our policy view accordingly. given the uncertainties, it should not surprise you that the committee members disagree more often than not, but usually at the margin, on what should happen in any particular month to interest rates. i regard that as a strength rather than a weakness of the process. it should not surprise you either that even though we consistently aim to hit the target, we rarely achieve it precisely. as a matter of fact, i have been genuinely, and agreeably, surprised that the outcome over the past few years has been as consistently close to the target as it has been. the best we can realistically hope for is that we come close on average and over time. and to achieve that, when we identify developments which are likely to move us away from our target on one side or the other, we must be ready symmetrically to adjust our policy to bring us back on track. that is why, even though the economy as a whole continues to perform relatively well on the data, we have moved interest rates downwards this year, to reflect the emergence of the new downside risks ; and it is also why we indicated, in our recent press release, that we will continue to monitor those downside risks. that is not a promise of further interest rate reductions, but it is a promise that we are prepared to move further if we have evidence that those risks are increasing. given our starting point, with inflation somewhat below target and expected to remain so for a while, we are relatively well placed to weather the storm if it begins to blow more strongly.

chart with different sectors ’ contributions to the whole economy labour productivity growth ( slide 4 ). the manufacturing and finance & insurance sectors made no contribution to average annual productivity growth in 2010 - 16. pre - crisis, these sectors contributed around ¾pp to annual average productivity growth. so combined, they accounted for over half of the growth puzzle to 2016, despite employing only 11 % of the workforce. indeed the treasury ’ s 2009 budget forecast applied a downward adjustment to the trend level of output of around 5 % between mid2007 and mid - 2010, which was within the range of external estimates of the impact of the global credit shock on medium - term potential output. haldane see also tenreyro all speeches are available online at www. bankofengland. co. uk / speeches three other sectors – communications, professional & scientific services, and real estate – almost fully account for the remainder of the growth puzzle. of course there are limitations to pre - crisis comparisons. the finance sector is a good example. increased leverage and risk - taking with financial firms prior to the crisis is likely to have boosted measured productivity, beyond what was sustainable. third, both slow growth in capital per hour worked ( known as capital deepening ) and the efficiency with which companies put their labour and capital inputs to use ( known as total factor productivity ) have contributed to weak growth in roughly equal measure. while the weakness in total factor productivity growth has been concentrated in manufacturing and finance, the weakness in capital deepening has been more widespread across sectors. in other words, whatever is driving slower capital deepening is likely to be more widespread across the economy. general uncertainty is one likely candidate, and may have been more of a feature in the uk than elsewhere, particularly in the period since the euro area crisis. indeed, the most commonly used measure of policy uncertainty has generally been more elevated for the uk than the equivalent measures for europe and the us, although it has fallen back sharply from its post referendum peaks ( slide 5 ). in periods of elevated uncertainty, businesses may be reluctant to undertake investment and prefer to employ more labour, which is easier to reverse, as i suggested in a speech in november last year. and a range of survey results suggest that brexit related uncertainty is an important factor weighing on investment in the uk, despite otherwise favourable conditions for capital expenditure globally and domestically. fourth, the slowing in uk productivity growth since the crisis has primarily reflected slower growth of high - productivity companies. as discussed in the