the rt hon sir edward george : a broadbrush review of the uk economy speech by the rt hon sir edward george, governor of the bank of england, at the lord mayor ’ s banquet for bankers and merchants of the city of london, mansion house, london, 18 june 2003. * * * my lord mayor, mr chancellor, my lords, aldermen, mr recorder, sheriffs, ladies and gentlemen dear friends and colleagues. how many of you here this evening have ever run the london marathon - perhaps we could have a show of hands? well of course i have … …. never, ever contemplated doing so for a moment. but someone who did complete it once described to me the surge of adrenaline he experienced with just a mile to go, followed shortly afterwards by near - exhaustion, until he finally collapsed over the finishing line! i think i ’ m now beginning to understand what he meant. if i have my arithmetic right - and that ’ s a big “ if ” - i was recently beaten all ends up at maths games by group of primary school children from tower hamlets - but if i ’ m right, after 41 years in the bank, this is my 27th successive attendance at this great annual bankers and merchants dinner and, you ’ ll be relieved to hear, the 10th and last time that i will have the honour of addressing you in my capacity as governor. and i should like to take this opportunity above all to thank all of you - and the various organisations that you represent - for the tremendous support that you have given to me and to the bank over so many years. i must begin, gordon, by thanking you. in fact i ’ ve been immensely fortunate to have first ken clarke and then you, gordon, in charge at the treasury during my time as governor. you shared the conviction that overall macro - economic stability - reflected in consistently low inflation - is a necessary condition for sustainable growth. that ’ s a conviction that is deeply embedded in my soul as a lifelong central banker - if indeed as a central banker i ’ m allowed to admit to having a soul! you inherited from ken an inflation target in the form of a cap and a degree of transparency - and public accountability - that we ’ d never had before. and, in your own, very first - and inspired - decision as chancellor, you advanced that approach radically further. you - rightly - kept the political responsibility for setting the inflation target - opting crucially for a symmetrical point target.

is needed to reach our price stability target and support sustained growth and job creation. but monetary policy cannot be the only active player in the field. other policy areas should contribute more decisively to raising the long - term growth potential and reducing vulnerabilities. tommaso padoa - schioppa warned monetary policy makers not to confuse the independence of the central bank with isolation. as he put it, “ strong currency requires a strong economy and a strong polity, not only a strong and credible central bank ”. 1 there is much room for enhancing coordination, each policy maker working within the perimeter of its mandate. with limited policy spaces this is ever more important. sound fiscal and economic policies at the national level are the first line of defence to deal with economic shocks. implementation of structural reforms needs to be substantially stepped up to increase resilience, boost productivity, and reduce unemployment in a lasting way. automatic 1 / 3 bis central bankers'speeches stabilisers should play their full role. all countries can reinforce their efforts to achieve a more growth - friendly composition of public finances. why is that important? because productivity growth is critical to rising living standards. sustainable growth requires more investment, research and innovation. to accomplish this, sufficient public sector contribution is necessary. we need to be able to secure investment in public infrastructure, including digital infrastructure, not least in countries that are lagging behind in 5g, or even more regrettably, sometimes even in 4g. a large and integrated single market is the cornerstone of the eu, but the member states also benefit from open global markets. at the same time, the transformation brought about by globalisation and the digital revolution has resulted in winners and losers. this, in turn, has helped to promote populist policies promising easy answers to difficult questions. protectionism, however, is not an answer. isolation is not possible without great losses in citizens ’ living standards. we should continue to work for a europe that pursues growth also from beyond its own borders through free - trade agreements ; for a europe that combines a strong entrepreneurial drive and a stability culture ; and for a europe that guarantees civil rights and social justice in the digital age. these are concrete goals for sustainable growth and job creation – and fundamentally for human development – that really matter to the citizens in europe, which should always be our key yardstick. next, let me turn to key policy priorities in the financial sector. a well - functioning financial system is fundamental