are good reasons for optimism that the recovery will be durable. but the journey back to full recovery is long and many challenges still remain. monetary policy is there for the long haul. that is the essence of our forward guidance. bis central bankers ’ speeches references haddow, a., hare c., holley, j., and shakir, t. ( 2013 ) “ macroeconomic uncertainty : what is it, how can we measure it and why does it matter? ”, bank of england quarterly bulletin, 2013 q2. ben haim, j. ( 2010 ) “ info - gap economics : an operational introduction ”, palgrave mcmillan bloom, n. ( 2009 ) “ the impact of uncertainty shocks ”, econometrica 77 : 3, pp 623 – 685 bloom, n., bond, s. and van reenen, j. ( 2001 ). “ the dynamics of investment under uncertainty ”, ifs working paper, no. w01 / 05. bond, s. r. and lombardi, d ( 2004 ) “ to buy or not to buy? uncertainty, irreversibility and heterogenous investment dynamics in italian company data ”, imf working paper no. 04 / 104. disney, r, haskell, j and heden, y ( 2003 ), “ restructuring and productivity growth in uk manufacturing ”, economic journal, vol. 113, issue 489, pages 666 – 94. dixit, a. and pindyck, r. ( 1994 ) “ investment under uncertainty ”, princeton university press gilchrist, s, sim, j and zakrajsek, e ( 2010 ), “ uncertainty, financial frictions, and investment dynamics ”, 2010 meeting papers no. 1285, society for economic dynamics. lazear, e and spletzer, r ( 2011 ), “ hiring, churn and the business cycle ”, nber working paper no. 17910. miles, d. ( 2013 ), “ monetary policy and forward guidance in the uk ”, speech given at northumbria university, newcastle, 24 september. bis central bankers ’ speeches

lazear and spletzer ( 2011 ) show that reduced uncertainty can prompt greater “ churn ” in the labour market leading to more efficient matching of skills to jobs. bis central bankers ’ speeches as quantitative easing and the funding for lending scheme. but if, over recent years, many companies have been largely focussed on survival, waiting for some of the uncertainty to be resolved before actively considering opportunities to invest and expand, it ’ s possible that the easing of borrowing costs brought about by these policies has not yet fully translated into spending decisions. as uncertainty lessens, past monetary policy actions may gain greater traction, thus further supporting the recovery. so there are good reasons for thinking that the reduced uncertainty may help to facilitate this handover to business spending we need to see, and that some of those effects may be long lasting. but we also need to be alive to the possibility that the events of the past few years may colour and contaminate business behaviour for many years to come. it may be a long time before companies look ahead with the same confidence that they did during the period of remarkable stability prior to the crisis. before their trust is restored that the authorities are able to stop really bad things from happening. before they rebuild their relationships with their banks. on this final point, many companies were let down by their banks during the financial crisis, and i fear that many will be reluctant to return to a business model which relies on their banks providing liquidity and support in times of need. the reluctance today of some companies to borrow from their banks may be less a lack of demand and more a breakdown of trust. although an understandable response to the events of the past few years, an increased prevalence of self - insurance is not good for the efficient functioning of our economy. the scarring effects of the financial crisis and the uncertainty it brought with it, together with the fiscal consolidation and the weakness of the euro area, are likely to continue to weigh on the recovery over the next few years. yes : our economy appears to have turned a corner. and yes : there are good reasons for optimism that the recovery will persist. but we can ’ t take it for granted : there ’ s still a long way to go. and that sense of how far there is to go underpins the policy guidance provided by the committee earlier this year and takes us to our third and final question : what next for monetary policy? what next for monetary policy? the primary objective of monetary policy remains to hit