’ s central view remains that inflation is likely to fall back in the second half of the year, possibly quite sharply. as ever, there are risks around that central view – in both directions. some of the biggest risks surround energy prices, supply factors such as migration, the level of asset prices, and the extent to which inflation expectations will prove to be a fixed or dragging anchor. pay growth is also important. as i said earlier, if investment and employment growth are to be maintained, the burden of higher costs on employers must either be passed back in the form of lower input costs or forward as higher prices. all of us – whether on the shop floor, in the board room, or in the public sector – are coming to terms with the fact that those higher costs imply a temporary, but only a temporary, slowing in the growth of our real take - home pay. that adjustment – difficult but inevitable – will be helped by the fall in energy prices since last autumn. but the belief that we could avoid the adjustment by pushing up our pay would lead to a self - defeating process of higher wages offset by higher prices. it is the task of the mpc to ensure that the process of adjustment does not lead to a persistent rise in inflation. bank rate was raised in order that inflation will come back to its 2 % target, and future action will depend upon how those risks to the inflation outlook materialise. the month by month path of interest rates required to bring inflation back to target is a matter of judgment. there is certainly room for reasonable people to disagree about the level or timing of changes in interest rates. there is no absolute truth here, and it is vital that the mpc keeps an open mind at all times. that in essence is my letter to you and all the members of the birmingham chamber of commerce. achieving the inflation target is, i believe, in the long - run interest of manufacturing no less than the rest of the economy. i recognise that the burden of changes in interest rates often falls disproportionately on manufacturers and other exporters as increases in interest rates push up the sterling exchange rate. and that comes on top of a secular decline – fifty years ago almost 40 % of gdp was produced by the manufacturing sector. today that share is around 14 %. but the continued relative decline of manufacturing – and indeed the strength of sterling – over the past decade or so reflects, not the stance of monetary policy, but the remarkable wind of change that has

financial risks from climate change that arise from the increased frequency of weather events and from the transition to a carbon - neutral emission economy. the test will motivate firms to address data gaps and to develop cutting - edge risk management consistent with a range of possible climate pathways : ranging from early and orderly to late and disruptive. this test will be the first of its kind to integrate climate scenarios with macroeconomic and financial models. the bank will develop the approach in consultation with industry, including insurers, and other informed stakeholders including experts from the network for greening the financial system and the pra ’ s climate financial risk forum. with this new supervisory approach, the bank will help ensure that the financial system is resilient to the risks and can take full advantage of the enormous opportunities in a carbon - neutral economy. the path to a carbon - neutral economy will affect every institution in this country — very much including the bank of england. we need to do more than just cutting out cups and bringing up bees. 35 we must lead by example. from next year, the bank will become the first central bank to adopt the tcfd recommendations across our entire operations. and to improve our strategic resilience, the bank will reduce the bank ’ s carbon footprint by almost two thirds by 2030, consistent with a transition to a 1. 5 degree world. 36 conclusion the new finance has the potential to unlock stronger, more sustainable and more inclusive growth. by taking the measures i outlined this evening, the bank can enable the new economy ; empower greater competition and ensure the resilience of the financial system. available at : https : / / www. bankofengland. co. uk / - / media / boe / files / prudential - regulation / supervisorystatement / 2019 / ss319. pdf? la = en & hash = 7ba9824bac5fb313f42c00889d4e3a6104881c44. see : https : / / www. bankofengland. co. uk / news / 2019 / march / first - meeting - of - the - pra - and - fca - joint - climate - financial - risk - forum. the bank has cut its use of cups and food boxes by over 80 % since 2016, that ’ s over 2 million fewer items of single use plastic each year. we are also working on promoting natural biodiversity at our