green finance. in my view, these should be resisted. while carefully circumscribed independence is highly effective in delivering price and financial stability, it cannot deliver lasting prosperity and it cannot address broader societal challenges. calls for the bank to solve broader challenges ignore the bank ’ s carefully defined objectives. and they often confuse independence with omnipotence. that is not to suggest that in a liquidity trap, fiscal policy would not have an important and powerful role. but even if that unfortunate circumstance were to come to pass, those decisions are best taken by governments. central banks are fiscal price takers ; the government is the stackelberg leader. in summary, in my view, all these issues underscore the value of a careful deliberate review of the current monetary framework, and the value of today ’ s research workshop. conclusion to conclude, the flexibility in the uk monetary policy framework means that the mpc has been able to support the uk economy through the changing of the seasons. despite the economy being buffeted by diverse and sizable shocks since the recovery began, inflation has averaged 1. 7 % ; gdp growth has generally been robust, averaging around 2 %, and above the subdued rate of potential supply growth. the wide margin of spare capacity present after the crisis was absorbed, unemployment is at multi - decade lows and employment at an all - time high. real wages have finally returned to relatively strong rates of growth. inflation expectations have remained anchored to the target, even when cpi inflation has temporarily moved away from it. this performance underscores that the bar for changing the regime is high. but it is nonetheless healthy to review it periodically, and that review is supported by the bank ’ s active research agenda. today ’ s workshop is organised with that in mind, and we appreciate all your contributions to help focus our research efforts. there is an old saying that there is no such thing as bad weather, just inappropriate clothing. with the economic climate changing, let ’ s ensure that the bank remains well suited to deliver its mission to maintain price and financial stability in support of the good of the people of the united kingdom. all speeches are available online at www. bankofengland. co. uk / news / speeches

projections ahead of the referendum, which were conditioned on a vote to remain. estimates of the drag from brexit vary, but to give some perspective, the level of uk gdp is currently some 3 % lower than might have been expected given how demand in the rest of the world has evolved since june 2016. 22 supported by the package of monetary policy measures, the broad - based global expansion and fiscal easing in late 2016, uk growth did rise above the subdued rate of potential supply growth. over the course of 2017 and 2018, unemployment continued to decline and spare capacity was steadily used up. as the labour market tightened and companies found it harder to recruit and retain staff, wage growth began to pick up as expected ( chart 11 ). across the economy as a whole, pay growth rose from around 1½ % a year during 2010 - 15 to around 2¼ % in 2016 and 2017 and 3 % in 2018. 23 although these rates of pay growth were still lower than pre - crisis averages that largely reflected weak productivity growth. as a result, indicators of domestic inflationary pressures, such as unit labour cost growth, rose towards rates consistent with the inflation target. the steady absorption of slack and the prospect of moving into excess demand by the end of the mpc ’ s three - year forecast period – evident in the dots showing the successive inflation report projections in chart 10b – reduced the degree to which it was appropriate to accommodate an extended period of inflation above the target. as a consequence, the mpc began to remove some of the policy stimulus, raising bank rate from ¼ % to ½ % in november 2017 and then to ¾ % in august 2018 where it has remained since. this comprised : a 25 basis point reduction in bank rate to 0. 25 % ; a term funding scheme to reinforce the pass - through of that cut to the borrowing rates faced by households and companies ; £60 billion of gilt purchases ; and £10 billion of corporate bond purchases. the fpc cut the counter - cyclical capital buffer rate to zero, increasing credit availability by up to £150 billion ; emphasised that banks ’ liquidity reserves are usable ; and amended the leverage ratio framework for uk banks by excluding central bank reserves. the pra board used regulatory flexibilities to smooth insurers ’ transition to new regulatory standards in a very low interest rate environment. this estimate is based on the approach to construct a “ synthetic ” measure of uk gdp described in ‘ the economic outlook : fading global tailwind