3 %, which means that the number of people claiming unemployment benefit, at under 950, 000, is the lowest for 26 years. and what has been a good period for the uk economy as a whole, has also been good - in an absolute sense - for wales. here on an lfs basis the rate of unemployment fell from the recent peak of over 10½ % in november 1993 to below 6 % in july this year for the first time since these data were collected ; and, on the claimant count basis, unemployment, which touched 10 % in the winter of 1992 - - 93, had fallen to 3. 8 % in august, the lowest rate since june 1975. but i freely acknowledge that it doesn't necessarily feel like that today - certainly not to everyone. i am only too well aware that there are a lot of people in every part of the uk - both business people who've been under real pressure and employees who have lost their jobs - who will react to these statistics by saying " well you could have fooled me! " that may well be true of some of you here this evening. the bank receives detailed reports every month from each of our 12 agencies throughout the uk, including reports from sue camper based in cardiff. many of you will know sue already - and i encourage those who don't to make yourselves known to her. the reports which she and her fellow agents make each month, based on their direct, first hand, knowledge of what's happening in their area, are fed directly into our monetary policy committee process. they play a vital part in informing our understanding of the macro - economic statistics which in themselves can only capture the overall, aggregate, picture. so we do know, i promise you, about the job losses and plant closures particularly in manufacturing. those on the receiving end won't thank me for saying this but some of those problems at the micro - economic level are an inevitable characteristic of every economy. needs, tastes, technologies and productive techniques are constantly changing even in the most benign macro - economic environment, and the rise and fall of individual businesses or business sectors, as comparative advantage shifts - nationally and internationally - is a painful but necessary facet of economic progress. obstructing such change cannot help in anything but the short term. the more constructive approach is to encourage the redeployment of resources to alternative activities where there is a prospect of comparative advantage. happily that is the path - the path to

the rt hon sir edward george : the state of the uk economy and the bank of england ’ s conduct of monetary policy speech by the rt hon sir edward george, governor of the bank of england, at the welsh development agency / bank of england dinner, brangwyn hall, swansea, on 16 october 2001. * * * thank you, david for that kind introduction. and thank you, too, for agreeing to co - host this dinner in the brangwyn hall this evening. it gives me great pleasure to add my welcome - on behalf of the court of the bank of england - to all of our guests. we are grateful to you for joining us. i should like to say a few words this evening about the state of the economy, and in particular to account to you - as stakeholders - for the bank's conduct of monetary policy. if you look back, since the recession of the early 1990s the uk has enjoyed 9 years of steady progress. inflation over that period, on the government's target measure, has averaged just 2. 6 % - and has been more stable than at any time in our history. now some people think that's all we care about at the bank of england - and we certainly do care about it - it is after all what we are paid for. but it is certainly not all we care about. low inflation is not simply an end in itself - it is a necessary means to the end of sustainable growth, to sustained high levels of employment, and to rising living standards which are, of course, the really good things of economic life. and what gives me personally - and my colleagues - real satisfaction is the fact that stable, low inflation has over this period been accompanied by steadily increasing overall output and employment, and by a progressive fall in unemployment. gdp growth since the spring of 1992 until this summer has averaged just about 3 % a year - which is well above most estimates of our trend rate of 2¼ % - 2½ % - and the longest period of sustained quarter - by - quarter growth we have enjoyed since quarterly records began in the uk in 1955. employment increased steadily from a low point of 25 ½ mn people in the spring of 1992 to a peak of over 28mn in the summer of this year. and the rate of unemployment has fallen from a peak of over 10½ % on the lfs measure to around 5 % ; while on the claimant count measure it has fallen from some 10 % to just over