remains far from the hoped - for recovery. structural reforms to improve opportunities for small businesses and job seekers would increase investment and productivity, and should therefore complement the current macroeconomic policy stance of the bank. food price inflation and the exchange rate in 2015, due to favourable oil price shocks, inflation averaged 4, 6 per cent. in contrast, inflation outcomes have exceeded 6 per cent this year because of food and petrol prices. the bank expects headline inflation to average 6, 7 per cent in 2016 and 6, 2 per cent next year. food prices are increasing due to the drought, whereas petrol prices are increasing because oil prices have risen off the extremely low levels prevailing at the start of 2015 and a weaker exchange rate. the drought, like oil price movements, is a supply - side shock to inflation. domestic price increases in maize, south africa ’ s staple food, have been extreme. since 1 january 2015, yellow maize prices have increased by almost 70 per cent while white maize prices have increased by more than 130 per cent over the same period. 5 in total, food prices make up 14 per cent of the consumer price index, and this measure increased by 11, 3 per cent calculated as change in real gross value added at basic prices. as traded up to 20 may 2016 on the south african futures exchange ( safex ). bis central bankers ’ speeches in april 2016, up from 4, 3 per cent ten months earlier. food inflation is forecast to peak at 12 per cent in the final quarter of this year. dry conditions since 2015 have caused a long period of herd culling, which increased the shortterm supply of meat and temporarily suppressed meat price inflation – thus, although grains inflation has accelerated since june 2015, meat price inflation accelerated this year. meat price dynamics were an important reason why food inflation rose at a slower - thanexpected pace last year. however, this trend has reversed in 2016, as food inflation rose faster than we had anticipated in the first four months of the year. furthermore, the rising cost of meat inputs and the lower supply of animals to the market are likely to push meat prices significantly higher over the course of 2016. food prices are not solely determined by domestic supply and demand ; they are increasingly influenced by international food prices and therefore by the exchange rate. 6 this is not necessarily negative. although south africa is a net food exporter, we do not have a comparative advantage in all food production. thus we rely on international prices, which are predominantly us

a transition in thinking and action remarks given by mark carney, governor of the bank of england international climate risk conference for supervisors, de nederlandsche bank, amsterdam 6 april 2018 i am grateful to alice carr, edd denbee, tanveer hussain, carsten jung, krish kistnassamy, alex michie, alex ntelekos, dimitris papachristou and matt scott for their assistance in preparing these remarks. all speeches are available online at www. bankofengland. co. uk / speeches it is a great pleasure to be here in amsterdam, at the international climate risk conference for supervisors, jointly organised by the de nederlandsche bank, the banque de france and the bank of england. in my remarks, i will take stock of the progress made in addressing climate - related financial risks since the paris agreement of late 2015. in particular, i will consider how far there has been a transition in thinking and action. as we ’ ve heard today, the thinking has coalesced around three channels through which climate risk affects financial stability : - the physical risks that arise from the increased frequency and severity of climate - and weatherrelated events that damage property and disrupt trade ; - the liability risks stemming from parties who have suffered loss from the effects of climate change seeking compensation from those they hold responsible ; and - the transition risks that can arise through a sudden and disorderly adjustment to a low carbon economy. the last risk is the most challenging. when i first spoke about the financial stability risks from climate change, at lloyd ’ s of london in 2015, i highlighted two paradoxes relating to transition risk in particular. first, the future will be past. that is, climate change is a tragedy of the horizon which imposes a cost on future generations that the current one has no direct incentive to fix. the catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors. once climate change becomes a clear and present danger to financial stability it may already be too late to stabilise the atmosphere at two degrees. the second paradox is that success is failure. that is, too rapid a movement towards a low - carbon economy could materially damage financial stability. a wholesale reassessment of prospects, as climate - related risks are re - evaluated, could destabilise markets, spark a pro - cyclical crystallisation of losses and lead to a persistent tightening of financial conditions : a climate minsky moment. the