and demand uncertainty ’, the quarterly journal of economics, 114, 1, pp. 185 - 227, 2019 ; d. altig, j. m. barrero, n. bloom, s. davis, b. meyer and n. parker, ‘ surveying business uncertainty ’, journal of econometrics, 231, 1, pp. 282 - 303, 2022. for instance, the interpretation of firms about the ecb ’ s inflation target, see m. bottone, a. tagliabracci and g. zevi, ‘ inflation expectations and the ecb ’ s perceived inflation objective : novel evidence from firm - level data ’, journal of monetary economics, 129, s15 - s34, 2022. m. bottone, e. mattevi, l. modugno, m. mongardini and a. neri, ‘ indebitamento e liquidita delle imprese nel 2020 : evidenze su microdati di impresa ’, ( only in italian ), banca d ’ italia, covid - 19 notes, 21 december 2021. i. balteanu, m. bottone, a. fernandez - cerezo, d. ioannou, a. kutten, m. mancini and r. morris, ‘ european firms facing geopolitical risk : evidence from recent eurosystem surveys ’, voxeu, 18 may 2024 ; l. panon, l. lebastard, m. mancini, a. borin, p. caka, g. cariola, d. essers, e. gentili, a. linarello, t. padellini, f. requena and j. timini, ‘ inputs in distress : geoeconomic fragmentation and firms ’ sourcing ’, banca d ’ italia, questioni di economia e finanza ( occasional papers ), 861, 2024. however, conducting traditional business surveys based on sound methodologies such as probability sampling is becoming increasingly challenging and costly for central banks. examples of key challenges include the rise in both the item non - response rate − which has tripled to 15 per cent for investment plans since the inception of our invind survey − and the unit non - response rate, especially among firms that perceive a high response burden. 13 moreover, the growing awareness and concerns about data privacy and time constraints14 not only

. in the uk, we adopted a target for inflation as long ago as 1992 and the whole framework for taking decisions about interest rates was overhauled after the 1997 election. i am sometimes asked how different british economic history would have been if we had adopted the present approach to monetary policy at various landmark dates – such as 1976 or 1979. this is a hard one. tolstoy famously said that all happy families are alike, but unhappy families are each unhappy in their own way. it is rather the same with monetary policy. there are very many ways of getting it wrong – the uk has some experience here - but the hallmark of all good monetary policy is what hans dietrich tietmeyer ( president of the bundesbank in the 1990s ) used to call ‘ the three cs ’ : credibility, consistency, and continuity. my own view, for what it is worth, is that there has been a virtuous circle over the past 10 - 15 years when central banks have taken advantage of relatively benign global conditions to embed the three cs, by successfully implementing better policy - making frameworks and establishing strong reputations for competence on the back of excellent track records. the bank of england would have faced a tougher challenge in doing this in the economic circumstances of the 1980s, and certainly the 1970s – even if the political consensus had existed to support such an experiment ( which it didn ’ t ). even the bundesbank built up its formidable reputation during the german post war economic miracle. that said, i do not think there is any doubt that the new approach to monetary policy did represent a major advance on what went before. in what way? inflation targeting, the uk ’ s current approach, broke with past attempts to run an independent monetary policy by offering commitment and clarity. for the first time, the government and the bank of england committed to clear objectives, clear communications and clear lines of accountability. we now have a decision - taking framework which allows monetary policymakers plenty of room for discretion, while forcing them to provide a full explanation of their thinking. by hook or by crook, the fact is that central banks do now enjoy considerable credibility. they treasure that legacy, much like any blue chip company, and for many of the same reasons. credibility, and the trust that flows from it, is worth a great deal in policy - making, as in business. if people believe that the bank will act to keep inflation low and stable they will factor that in to their decisions. ( they may