: 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

banks have been on the alert for any signs that higher oil prices would feed into higher wages, and so trigger an inflationary spiral. and so far wage growth has remained moderate in all developed countries, including the uk. monetary policy inflation has remained firmly under control despite a doubling in the price of oil. this, to my mind, is striking evidence of a sea change in policy since the 1970s. but how far was the great stability due to good policy, as opposed to globalisation or plain good luck? this broader question is probably unanswerable, but a couple of points are worth making. first, there is no doubt that, in the medium term, the actual inflation rate is determined by the bank of england. our decisions about interest rates – the price of money – determine the amount of total money spending in the economy. the rate of inflation reflects the difference between this spending and what the economy is capable of producing – total supply. the faster money spending grows relative to supply, the higher inflation will be. in that sense low inflation reflects policy, not luck. but external conditions may make it more or less easy to keep inflation low and stable. if the bank aims for a low but positive rate of inflation, and imported goods prices are falling, the prices of other goods and services will have to rise faster to compensate. so for example, the prices of imported goods and services fell by 13 % between 1995 and 2004, while the prices of other consumer goods and services rose, on average, by around 20 %. to produce this result, and keep overall inflation close to target ( as it was ), the bank was probably able to keep interest rates lower than they might otherwise have been. that ’ s why people sometimes say that the falling world prices resulting from globalisation have acted as ‘ favourable tailwinds ’ for central banks over the past decade. and why, over the last couple of years, there have been worries that high and volatile energy prices would provide ‘ strong headwinds ’. second, there have been important innovations in the practice of monetary policy over the past decade. these have not been confined to the uk - there is an international traffic in good monetary policy ideas, as in almost everything else. so while the uk was a pioneer in some respects, our current approach to policy is more fairly described as close to international best practice. there ’ s been a widespread move to give central banks more independence, with clear objectives and a strong commitment to transparency and accountability