wholesale gas prices. steps have also been taken to help firms. higher gas prices will now increase the ( indirect ) government subsidy to energy users, rather than the utility bills they pay. this shifts the main macro risks stemming from gas price rises away from higher headline inflation and a squeeze on household real incomes towards greater pressure on the fiscal deficit and ultimately the public finances more widely. ensuring that this shift – in concert with other fiscal policy actions – does not bring the longer - term sustainability of the public finances or respect for the wider institutional 3 / 8 bis - central bankers'speeches framework for macroeconomic policy into question remains key : both in and of itself, but also because maintaining the credibility and integrity of that framework supports the effectiveness of monetary policy in pursuing its own objectives. in this context, it is welcome that the role played by the office for budget responsibility ( obr ) in scrutinising the government's fiscal plans will be resumed in the forthcoming budget statement. its independent, external scrutiny of the outlook for the public finances will bolster the credibility of the process, thereby helping to add stability in what is a volatile environment at present. the need for a balance between, on the one hand, targeted and timely action on other dimensions to complement monetary policy decisions ( which, by nature, have a broader and more medium - term impact ) and, on the other hand, wider respect for the institutional framework for macro policy, also arises in the context of actions taken by the bank and other actors to support the functioning of financial markets for financial stability purposes. monetary policy works through the financial system. monetary policymakers therefore have a stake in liquid and well - functioning markets as vehicles for the transmission of their policy decisions. more widely, the bank of england as a whole has an obvious interest in maintaining orderly markets that support healthy price formation and an efficient allocation of capital and resources. the bank also has a statutory responsibility for financial stability, which it takes very seriously. in the face of dysfunction that has emerged in some specific market segments in recent weeks, the bank is conducting a set of temporary and targeted financial stability operations to support the gilt market. their goal has been to permit an orderly deleveraging of positions held by so - called liability driven investment ( ldi ) funds, which became vulnerable in the volatile market conditions we have seen of late. in taking this action, the bank has sought to prevent the emergence of a self - sustaining vicious spiral of collateral calls, forced sales and disappearing

decisions, i take a'full information approach '. i don't want to throw out any potentially relevant information on arbitrary grounds. consistent with this approach, when asked about the role monetary aggregates play in my policy thinking at a recent treasury select committee hearing, i sought to steer a course between recognising that monetary developments can – and often do – offer important insights into the outlook for the economy and monetary policy, but at the same time noting that money is not a'summary statistic'that alone can or should determine monetary policy decisions. monetary developments need to be incorporated into a wider assessment of the economic outlook, such as the mpc forecast that we publish regularly in the monetary policy report. the importance attached to money in that context will vary over time and depend on interactions with other variables. for example, last year the likelihood of stronger consumption spending by households as we recovered from the pandemic 5 / 8 bis - central bankers'speeches could be assessed by evaluating the'monetary overhang'– the stock of household bank deposits held in excess of what might have been expected on the basis of historical norms – that was accumulated during lockdown. the same thinking applies to any macroeconomic or market information. in principle, it should be considered relevant to the extent that it informs well - designed monetary policy actions. that is why the mpc has placed such weight on its forthcoming forecast round, where a comprehensive and encompassing assessment of all sources of relevant information can be made, which internalises the interactions and interdependencies among various time series. but i realise that saying all information is potentially equally important runs the risk of suggesting that all information equally unimportant. to give an insight into my decision process, some hierarchy of analysis is required. so, i will highlight here three areas that weigh heavily at present on my thinking. first, fiscal policy. over the summer, there has been considerable news on this dimension, which the mpc only partially digested in its september policy assessment and decision. i have already mentioned the energy price guarantee. relative to where we might otherwise have expected to be early next year on the basis of wholesale gas futures prices, the introduction of the £2500 cap on an average energy bill directly reduces cpi inflation. of itself, the resulting lower and flatter profile for headline inflation should diminish the risks coming from potential second round effects, and a make shift towards more inflationary psychology less likely. against that, lower utility bills will