##s more substantially, alongside easing supply pressures. that could happen for instance if household confidence falters in response to rising covid cases or if further new variants emerge. a combination of weaker demand and easing supply pressures could see inflation falling back faster in the medium term, not just towards but potentially back below our 2 % target. for me although my starting point for navigating the economy is the may mpr forecast overlaid by what has happened since, there is still real uncertainty as to what path the economy will take. that was one reason why i thought the conditions to consider tightening set out in the mpc forward guidance were not yet met at our june meeting. but based on the rapid pace of developments since we published our may forecasts and the shift in the balance of risks i can envisage those conditions for considering tightening being met somewhat sooner than i had previously expected. that reflects my current assessment that on balance i put more weight on my inflationary than my disinflationary scenario. but there should no presumption that the recent strength in demand and inflation will be sustained, and while i do currently put less weight on my disinflationary scenario, it is too early to rule it out. along with the rest of the mpc i will continue to watch the data and newsflow closely. as and when conditions for considering tightening are met there is also the question of how we might tighten policy. the monetary policy toolbox has come a long way since the days when it contained a single tool, the all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice bank rate. 6 as the terrain has got more complicated to navigate, the tools have become broader in range and more complex, including bank rate, forward guidance and asset purchases. indeed as things stand we have an asset purchase programme in progress which is not due to complete until the end of the year. back in february this year the mpc asked the bank to take steps, and the pra to engage with pra - regulated firms, to ensure negative rates could be implemented in practice if needed ; that work is due to complete in august. and the mpc have begun work to reconsider our previous guidance on the appropriate strategy for tightening monetary policy, as we committed to in our february minutes. of course i am just one of nine members of the mpc navigating a path for the economy

navigating the economy through the covid crisis speech given by dave ramsden, deputy governor for markets & banking the strand group, king ’ s business school 14 july 2021 with thanks to tom smith and michael yoganayagam for their assistance in preparing these remarks, and to numerous colleagues, including saba alam, andrew bailey, nick bate, max english, greg kidd, andrew hauser, maggie illingworth, sarah illingworth, sean maloney, alex rattan, andrea rosen, michael saunders, fergal shortall and silvana tenreyro, for their many helpful contributions. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice introduction it ’ s very good to be back speaking at this 51st strand group event and in my role as a visiting professor at king ’ s. this is the third strand group event i ’ ve spoken at but my first time speaking to you virtually. i ’ ve been involved in forecasting throughout my career, both in my current role as a monetary policy committee ( mpc ) member and in my previous civil service career at hm treasury. 1 outside of work i ’ m also a keen mountain walker – most recently being lucky enough to spend some time on the isle of skye – and it ’ s hard not to see parallels between the two activities. forecasts act as a map for policymakers of where the economy is heading, showing what adjustments to the current path are needed to avoid impending hazards and ensure they safely reach their policy objectives. 2 i should be clear at the outset, to borrow a well - worn quotation, that “ the map is not the territory ”. 3 the forecast summarises what is likely to happen on the journey, but it is the economy itself that we as monetary policy makers must navigate, using the forecast alongside many other inputs, including a wide range of data and intelligence from the bank ’ s network of agents. and as can sometimes happen when walking in the mountains, different mpc members can interpret the territory in different ways, supplementing the use of a map with the equivalent of a compass and gps as well as their own judgement. 4 the job of economic forecasting has become increasingly tricky over recent years, as the economic territory underfoot has become less and less familiar. the 2007 - 09 financial crisis was characterised by very large impacts on the supply side of the economy, as well as complex financial