yes ”. since that forecast was completed things have gone in different directions. the prospect for external demand has somewhat weakened and so too has the oil price. there are mixed messages relating to tightness in the labour market, but earnings growth has so far remained reasonably well contained - as it must continue to do. on the domestic demand side, private consumption growth has remained stronger than we had supposed, while the growth in private investment has been weaker ; meanwhile it is not clear that underlying public sector demand has – at least yet – picked up as rapidly as planned. the exchange rate has fallen, and so, too, have market interest rates. i would not venture to suggest how these – and all the other developments we look at – will influence our next forecast in february ; and it would be pointless to anticipate possible future policy decisions. i would be surprised if they radically altered the broad prospect of relatively steady progress over the next two years. but i can assure you of one thing : if the prospect – or the balance of risks around it were to change significantly – either in the context of our february forecast or subsequently – we will promptly react to that change. despite the fact that we left interest rates on hold again last week, we have certainly not gone to sleep! we cannot guarantee that we will always remain as close to the symmetrical inflation target as we have been in recent years – the uncertainties as i have explained are too great for that degree of confidence. but that remains our aim. and i will be happy to report back to you again at your next dinner. let me, mr president, just conclude by congratulating you and the chartered institute on your achievements – not just over the past two years though i do congratulate you on that, especially, if i may, on your introduction of your new chartered banker qualification. but i congratulate you more broadly on your achievements over the whole 125 years since your foundation. and let me invite all your guests now to rise and to join me in wishing you well over the next 125 years. ladies and gentlemen, please join me in a toast to the continuing achievements of the chartered institute of bankers in scotland.

provide a reasonable background for our own economy. we – and our partners in the european union – would be relatively little affected by the us economic slowdown. the world economy as a whole would certainly be helped by the somewhat softer oil price – though i appreciate there may be mixed views on that up here in scotland. and the recovery of the euro – including its recovery against sterling – will help to ease the severe imbalance within our own economy between the domestically - orientated sectors which have typically been doing relatively well and those businesses and sectors that are most exposed to competition from the eurozone and which have been having a rough time. that imbalance is, i know, a real concern up here north of the border, and it has more generally for some time been one of the most difficult issues confronting us in conducting monetary policy. but there are, of course, also major domestic uncertainties. what – as i have often explained before – we are seeking to do through monetary policy – in order to achieve the government ’ s inflation target – is to keep overall nominal demand growth more or less continuously in line with the supply - side capacity of the economy to meet that demand. that is a necessary condition for maintaining our steady economic progress. but we cannot directly observe supply - side capacity in either product or labour markets, nor therefore anticipate just how it will develop, with any great precision, nor do we know precisely what is currently happening or is likely to happen to the rate of growth of aggregate demand in the economy anyway. our forecasts and policy judgements are based upon very careful scrutiny of all the latest data available to us, informed by the best technical analysis we can muster. but they necessarily remain our best judgements and that, of course, leaves us vulnerable to assertions that we do not give sufficient weight to this or that factor. for what it is worth, at the time of our last forecast in november, our central projection – on the assumption of 6 % interest rates – was for output growth of around 2½ % over the next couple of years, with rpix inflation remaining modestly below target this year but rising to 2½ % in 2002. there was, of course, a good deal of uncertainty around that central projection, as there always is, for the reasons that i ’ ve tried to explain. but on the basis of that forecast the short answer to the question : can our steady economic progress be maintained over the next couple of years is a cautious “