improving their human capital skills, including presentational skills, to instil confidence in potential investors. the bank hopes to produce, before the end of the year, a follow up to the 1996 report. we expect to be able to demonstrate encouraging progress in a number of areas ( particularly the provision of seed, start - up and early stage new capital ). closing remarks much of the focus of today ’ s conference has been on high - growth, entrepreneurial firms - the gazelles. it is important also to remember the great majority of small firms that are not intent on breaking speed limits and are quite content driving in the middle lane, do not have. com in their names, but are steadily contributing to output and employment. these firms are important. nonetheless, it is the high growth firms that will continue to remain at the leading edge of the creation of an entrepreneurial economy. continued public and private sector support for these firms is vital. the bank of england will seek to continue to play its part, both in maintaining macroeconomic stability and in encouraging the better financing of growing businesses.

whole and not to individual regions or economic sectors. when it joins emu, a country has to be aware of this fact and to accept this rule. however, the degree of dispersion in inflation is not alarming and it is not notably higher or different from that seen in a long - established monetary union, such as the usa. this brings me to another issue currently under discussion in europe : deflation. the inflation rate in germany is currently the lowest in the euro area. with the german economy in stagnation for the third consecutive year, the imf staff recently published a paper which rang alarm bells as it stated that many indicators point to deflationary forces being at work in germany. however, the imf talks about “ mild deflation ”, not comparable with the deflationary downward spiral in japan. the debate suffers from confusion about the meaning of the term “ deflation ”. i think this word has to be used with extreme caution. properly defined, deflation describes prolonged periods of a declining price level in conjunction with an economic slump. what we have seen so far in germany is an ongoing process of disinflation. however, the risk of “ mild ” deflation occurring in germany cannot be completely ruled out and that risk is at least higher than in other euro - area economies. however, a few relevant points need to be made. • the expected decline in cpi inflation is being driven mainly by energy prices and the appreciation of the euro. • there is no indication of any restraint on private consumption induced by negative price expectations. price expectations are positive. the decline in consumption expenditure is caused by negative prospects of lower disposable income – higher taxes and increasing costs of the social security system are expected – and employment risks. • according to our empirical studies, the current weak credit growth in germany is not due to a general credit crunch but mainly to low demand for credit. • furthermore, the liquidity situation in germany as well as in the euro area as a whole is favourable. however, concerns remain about the prospects of continued stagnation at stable prices. to bring what i have to say this evening to a close, i should like to make a couple of remarks about the issues lying ahead of us in emu. as i said earlier : with the maastricht treaty european leaders have demonstrated their ability to take decisive action. it's time for europe to deepen the integration process further. 1. we need to overcome the