been accompanied by improved macro - economic outcomes. since 1992, inflation has averaged 2 % - exactly in line with target ( to one decimal place ) and 6 percentage points lower than in the preceding 25 years. the volatility of output has fallen by around half over the same period. 6 contrary to everyone ’ s expectations, inflation - targeting has lasted and delivered a twin - win, with greater stability on both the nominal and real sides of the economy. 7 given the uk ’ s previously chequered monetary history, this truly is a transformation. of course, there is a question about how much of this improved performance reflects good luck rather than good monetary management. in the years running up to the global financial crisis, a period known as the great moderation, these explanations were difficult to disentangle. 8 shocks to the economy were modest and unthreatening over this period, at least relative to earlier episodes. governor mervyn king called this the nice era – non inflationary continuous expansion. 9 but the macro - economic period since 2007 has been naughty, not nice. the past 15 years have presented as many macro - economic challenges as any in recent history : first the collapse of the global economy associated with the global financial crisis ; then its localised after - shock, the euro - area crisis ; then the run - up to, and aftermath of, the brexit referendum ; and most recently, of course, the covid crisis. we have gone from a nice era to a vile one – volatile inflation limited expansion. yet despite those challenges, uk inflation expectations have remained anchored to the 2 % inflation target. in the 1970s, 1980s and 1990s, volatility in near - term inflation and output was mirrored in medium - term inflation expectations, as credibility swung with the wind. inflation - targeting has broken decisively that link. that nominal anchoring, courtesy of inflation - targeting, has in turn eliminated one crucial source of past macro - economic instability in the uk. based on data to the end of 2019. haldane ( 2020 ). see stock and watson ( 2003 ) and bernanke ( 2004 ). king ( 2003 ). all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice and so to the present day. while the essentials of inflation - targeting are as strong as ever, the regime is being tested as never before. the covid crisis has seen interest

##bu board last met to discuss monetary policy. 1 / 2 bis central bankers'speeches on the one hand, increases in social payments, as well as the monetization of utility subsidies are planned for the coming months. although the effects of these individual factors are insignificant, their combined impact on inflation expectations could be substantial, on the back of greater uncertainty arising from presidential and parliamentary elections. on the other hand, a more noticeable strengthening in the hryvnia exchange rate than is envisaged in the current forecast, is helping curb inflation. that said, the risks to inflation decreasing mentioned by the nbu in its january macroeconomic forecast continue to persist. what will the nbu ’ s monetary policy stance be in future? after balancing the need to bring inflation back to its target against the risks that could prevent inflation from decreasing, the nbu board has decided to leave the key policy rate unchanged, at 18. 0 % per annum. although leaving the key policy rate unchanged, the nbu board said that it could cut it in the future. how soon the nbu will adopt an easing cycle will depend on how steadily risks of inflation decrease and inflation expectations improve. looking ahead, any changes to the key policy rate will be based on the nbu ’ s updated macroeconomic forecast that will be published in april. a summary of the discussion by monetary policy committee members that preceded this decision will be published on 25 march 2019. the next meeting of the nbu board on monetary policy issues will be held on 25 april 2019. thank you for your time! 2 / 2 bis central bankers'speeches