particularly if households retrench further. rather, my vote to raise rates was driven by a concern that – despite a relatively weak outlook for growth – the risks to the inflation target in the medium - term were to the upside. in particular, the risks from continuing global price pressures and the effects of the prolonged period of above target inflation meant that the level of demand consistent with achieving the inflation target had probably fallen. nasty reasons rather than nice ones. 15 i should stress that i ’ m not at all certain that this will turn out to have been the right policy decision. a key lesson i learnt from the financial crisis is that economists know a lot less about the economy and how the economy works than many would like to believe. policymakers need to approach their task with humility and pragmatism. if growth turns out to be materially weaker than i anticipate or other medium - term pressures on inflation ease unexpectedly, i will reverse my decision. but with growth expected to be around its average historical rate, inflation likely to remain above 4 % for the rest of this year and bank rate at record low levels, some withdrawal of policy stimulus seems sensible. the juxtaposition of high inflation and loose monetary policy means that there is an onus on the mpc to explain its actions. the case for the defence needs to be made. and we have a good story to tell. we can explain why inflation has been above target for much of the past few years. we think we understand – albeit with the benefit of hindsight – why we have been surprised by the strength of inflation. and we have learnt from those episodes. i can ’ t say that monetary policy will perfectly anticipate every twist and turn of the economy. we will continue to be surprised by events and need to adjust policy accordingly. but i can assure you that the mpc remains as committed and as focused as ever in our determination to hit the inflation target. this distinction between nice and not nice reasons for raising bank rate was made in an interview by charlie bean with the western mail on 1 february 2011. bis central bankers ’ speeches bis central bankers ’ speeches references batini, n, and e. nelson ( 2005 ), “ the u. k. ’ s rocky road to stability ”, working paper no. 2005 – 020a, federal reserve bank of st. louis. bean, c ( 2011 ), “ the mpc ’ s policy dilemma ”. speech at abi ’ s

doing business throughout the eu under passporting arrangements, as well as uk banks doing likewise, and branches of institutions from other eu states operating here in london. the main purpose of this letter is to ensure that all firms are making, and stand ready to execute in good time should the need arise, contingency plans for the full range of possible scenarios. the fpc will oversee this process of contingency planning to mitigate risks to financial stability. asking firms to plan thoroughly is the hallmark of the prepared and professional approach we take to promote financial stability. the statement is available at http : / / www. bankofengland. co. uk / publications / documents / news / 2017 / 008. pdf. all speeches are available online at www. bankofengland. co. uk / speeches vii. conclusion the uk has been at the forefront of efforts to make the global financial system safer, simpler and fairer. recognising our role as guardians of the leading international financial centre, we have gone further than these minimum global standards. these efforts ensure that the world ’ s largest international financial centre both protects and serves the uk economy. and they mean that others can rely on us as a pillar of strength for the international monetary and financial system. as the fpc has made clear, we won ’ t turn our backs on these hard won gains. there should be no bonfire of financial regulation. but we will be dynamic – learning by doing and making adjustments, as necessary, to optimise our efforts without compromising on the level of resilience the world ’ s leading international financial centre demands. we will ring fence our banks to protect the core retail financial services they provide to households and companies. we won ’ t allow undercapitalised, opaque financial institutions to operate freely within our borders. but, while we won ’ t hesitate to do what ’ s necessary to protect the uk real economy, we will also work tirelessly for a responsible and open financial system that benefits all. a decade of hard fought financial reform creates enormous opportunities. it is all too easy to give into protectionism, but the road less taken is often the most rewarding. all the conditions are in place for following the high road of mutual recognition and cooperation both with europe and across the g20. the uk has the expertise, the temperament and the will to take this path, one that will make all the difference to all our citizens. all speeches are available online at www.