with its potential. against the background of this encouraging overall picture, we face two main areas of uncertainty at present. the first is the impact of the strong exchange rate for sterling. the strength of sterling in recent years has impacted on virtually all areas of the economy - agriculture and some service industries as much as manufacturing. but the effects have undoubtedly been felt most severely by manufacturing. the frustration felt by those who have built up efficient and competitive businesses, only to find their market position threatened by a rise in the exchange rate over which they have no control, is entirely understandable. in our judgments on interest rates, we consider it extremely important to take account of differences in the conditions that different sectors of the economy, and different regions of the country, may be facing. for that reason, our 12 agents, located around the country, keep closely in touch with local business and provide us with a continuous and very up - to - date feedback on local business conditions. visits like my own today provide valuable opportunities for mpc members to supplement at first hand the feedback we get from our agents. the message we get - that the rise in sterling has been, and is, causing severe strains, comes through loud and clear and we give that considerable weight in our judgments about interest rates. the difficulty we face is that, while some part of sterling ’ s rise in the past few years probably reflects underlying strengths in the uk economy - the sustained growth in activity in recent years and the more flexible and competitive structure of the economy - it is very likely that sterling at its present levels is unrealistically high, and that this is principally a reflection of the persistent weakness of the euro over the past year or so rather than factors directly related to sterling. to compound the difficulty, it is in fact very hard to see why the euro has remained relatively weak at a time when growth in the euro - area economies as a whole has recovered strongly. for the moment, in judging the appropriate level of interest rates, we take very carefully into account the weakness of the uk ’ s external sector, and the impact particularly on manufacturing, as an immediate factor off - setting in part the buoyancy of domestic demand. but we also have to take into account the possibility further ahead that, if the exchange rate moves back to more realistic levels, as we expect, the boost that could bring to external demand could only be accommodated, without strain on the supply capacity of the economy as a whole, if domestic demand has moderated

: combining the innovation of faster payments, direct debits and widespread use of online banking ( to give just three examples ) with a resilience record which – though by no means perfect – stands in contrast to some other parts of the financial system. so why the need for change? there is a one word answer to that, and that is : complexity. the uk has world - beating technologies. but too many sit in silos. to make a domestic retail payment, you can use physical cash ( drawn from a bank or a link atm ), a cheque, a credit or debit card, a real - time payment over fps, or a batch payment across bacs. wholesale payments may go through chaps or the embedded payment schemes of crest or lch. http : / / www. bankofengland. co. uk / publications / pages / speeches / 2015 / 799. aspx all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx cross - border payments might use a correspondent bank, a direct link to an overseas rtgs system or cls. in fact, it ’ s easy to list 10 or 15 payments pathways without even trying. each system does a great job for its own customers. but each operates, by and large, in splendid isolation from one other, requiring different standards and languages, technologies, fees and governance frameworks. those frictions in turn create barriers to entry for new payments providers, and can also pose risks to system - wide resilience, making it hard ( sometimes impossible ) to reroute payments between systems in the event of outages. those characteristics are increasingly anomalous in a world in which payments users are demanding ever more seamless services – in real time, 24 / 7 – at lower cost, using the latest technology, providing rich information – and, perhaps most importantly of all, in ways that are secure against increasingly innovative forms of cyber attack. that is why it is timely to look afresh at the uk ’ s retail payments systems, as the psf has done. of the many recommendations in this report, three are of particular importance to us at the bank : - first, the consolidation of fps, bacs and the cheque and clearing company into a new integrated retail payments scheme should ensure a strong systemic risk manager, governance body and procurer of a new generation of retail payments infrastructure