assessing the margin of spare resources in the economy is unusually difficult at present. capacity utilisation within companies, as measured by surveys, has risen. although unemployment has risen further, it is difficult to know how much of the rise in unemployment actually represents increased slack in the labour market. over the past year or so, the labour force has grown rapidly, following strong migration from eastern europe and elsewhere, and a rise in participation rates. there is, of course, great uncertainty about the scale of migration which has clouded estimates of the supply capacity of the economy. moreover, it is difficult to know how far migration affects demand for goods and services as well as supply. so the overall impact of migration on inflation in the medium term is unclear. against a background of firm growth and a limited margin of spare capacity, and with inflation above the target, the mpc judged last week that an increase of 0. 25 percentage points in bank rate was necessary to keep cpi inflation on track to meet the target in the medium term. so that is where we are now. where will interest rates go next? i do not know. and the reason i do not know is that we do not take our decisions in advance, but wait to see how the economy unfolds and then take our decisions one month at a time. the black country is where it all began. but now we must look to the future. the black country has entered a new era. and you are making it happen. i have explained how the mpc sees the prospects for the economy. if we can retain the degree of stability that we have seen now for more than a decade, then you will have the opportunity to start and expand businesses that will compete for black country business awards in the years to come. the winners tonight are shining examples, and i know you are all looking forward to finding out who they are. it has been a pleasure to come back to where it all began for me. and, whether or not you are one of the lucky few to win an award tonight, i wish your business every success.

cricket for the first time. young people need role models and sport is perhaps the most important source of them. of the many black country sports men and women who have been role models down the years, there is one whom i would like to single out tonight – vikram solanki. born in rajasthan, vikram moved to wolverhampton as a small boy, and became the finest and most exciting batsman to emerge from the area for a long while. now captain of worcestershire, one could not think of a better role model to bring communities closer together. that is why i am pleased to say that i shall be one of vikram ’ s patrons for his benefit year in 2007. of course, i could not talk about sport in the black country without referring to football. nowhere had, in my day, more first division teams within a few miles radius than the black country. and all the supporters of those teams have had many opportunities over the years to learn how to win and, especially, how to lose. but for the sake of local interest and rivalry, i am looking forward to the day when wolves and the albion are restored to the premiership. just as football needs a referee, so does the economy. i think of the bank of england ’ s monetary policy committee – the mpc – as the referee for the economy. the mpc sets interest rates to keep inflation on track to meet the 2 % target. we want to allow you to focus on running your businesses – you are the players – while the mpc quietly gets on with its job. you may have seen in the news that yesterday the bank of england published its latest inflation report. that set out our view on the prospects for the economy over the next couple of years. perhaps i could briefly summarise our latest analysis of the uk economy. for the past year gdp has grown at a rate around its long - term average. inflation has picked up and has been above the 2 % target since may. overall, the central view is one of inflation rising further above the target in the near term, before falling back to the target. the risks around that benign central view are seen by the mpc as broadly balanced, but there is significant uncertainty about the outlook for inflation. the outlook for growth remains one of a continued modest rebalancing of demand, with consumer spending growing at close to its long - run average rate, business investment continuing to recover, and net trade making a small positive contribution to growth. the mpc judges that