half of this year were growing at around their long - run average rates. after a prolonged period during which consumer price inflation was below its 2 % target, inflation has been above target for nine out of the past thirteen months. so what are the challenges facing the monetary policy committee as it tries to bring inflation back to the 2 % target? since their peak in early august, oil prices have fallen by around a quarter. in due course, that will ease the pressure on petrol prices and fuel bills, including gas and electricity. the direct impact was seen in the producer price data published yesterday, and will be seen in cpi inflation over the coming months – making it less likely that i will have to write an explanatory letter to the chancellor than was the case two months ago – although the anticipated fall in inflation for september may not persist for long. over the past year, profit margins, especially in manufacturing, have been squeezed and outside the oil sector the share of profits in gdp has fallen. the recent fall in oil prices will ease the pressure on firms ’ input costs allowing them to restore profit margins without an increase in output prices. nevertheless, according to surveys, businesses are more likely to raise prices than during the nice decade. and in their own survey, the bank ’ s agents found that half of those ( largely manufacturing ) firms which had experienced some erosion of margins were now intending to raise prices. not so bad : not of the same order but also desirable. speech at the eden project, cornwall, october 2004. a change in oil prices does not in itself tell us where overall inflation is headed in the medium term. for that, we need to look at the balance between money spending and potential supply. the growth of total money spending in the economy has picked up in recent quarters – nominal domestic demand rose by 6 % in the year to q2. and the growth rate of broad money and credit in the economy is now higher than at any point since 1990. there is, however, great uncertainty about potential supply. the possibility of continuing migration from the new member countries of the european union and elsewhere is likely to increase the potential labour force available to uk employers. and it appears that more people of pensionable age are choosing to continue to work. the difficult judgment facing the monetary policy committee is to what extent that increase in labour supply, and hence potential output, will allow a faster expansion of total money demand without upward pressure on inflation. given the uncertainties about the supply potential of

of operational and cyber risk. recovery and resolution regimes for ccps need to take more account of threats to ccps from this direction. whether this should mean more loss absorbing capital at ccps, access to member resources in the event of non - default losses or some combination of the two is a matter of ongoing discussion. but given the role ccps play in the financial system, we need to think more about how we would resolve a ccp that had suffered a major operational failure, without entry into insolvency. similar issues arise in the context of the resolution of systemically important banks. having published guidance on resolution strategies for ccps in 2017, the financial stability board ’ s fmi cross border crisis management group is now focused on two issues that remained outstanding ; namely the adequacy of financial resources for resolution and the treatment of equity in resolution. bank resolution the lehman brothers episode with which i started today exposed brutally that insolvency is not an option for large cross - border banks that perform critical economic functions. one of the main objectives of the post crisis reforms has been to put in place bank resolution regimes that enable the authorities to stabilize a failing bank by bailing in its debt holders to restore solvency and regulatory capital. the aim, as i have said, is to enable the bank ’ s critical economic functions to continue, without taxpayer support, while it is being resolved. a great deal has been achieved. all speeches are available online at www. bankofengland. co. uk / speeches we now have agreed international standards covering the design of resolution regimes, the amount of ‘ bail - inable ’ resources banks must hold, and agreement with industry participants to ‘ stay ’ termination rights by counterparties in derivative and repo transactions if resolution is in train. alongside this we also have international guidance on how to ensure continuity of access to fmis as well as on the mechanics of executing a bail - in. the uk now has in place a comprehensive and effective bank resolution regime that implements the eu ’ s bank recovery and resolution directive ( brrd ) and the international standards. the bank of england has been established as the uk ’ s resolution authority with a wide range of powers to ‘ bail in ’ shareholders and creditors of failed banks. the biggest uk banks have begun to issue bail - inable debt at scale and are well on their way to meeting the target for loss absorbing resources in resolution. key policies and guidance to firms have been issued, notably on operational