the greater stability of both inflation and output. there are three key elements in the regime. first, there is a clear and unambiguous objective for monetary policy – an inflation target of 2½ % – set by the government. second, decisions on interest rates are taken each month by the monetary policy committee ( mpc ) comprised of nine individuals with expertise in monetary policy – five executive members of the bank and four non - executives – who operate on the basis of one person, one vote. there is, therefore, an appropriate division between the objectives of monetary policy, which are set by the democratically elected government, and the implementation of those objectives, which is delegated to a group chosen for their expertise. the third, and crucial, component of the regime is that the monetary policy process is characterised by a high degree of transparency and openness. minutes of the mpc meetings are published within two weeks and the bank ’ s quarterly inflation reports contain the committee ’ s views on the outlook for inflation and output. it is important that the monetary policy committee explain its decisions, not least to make future decisions as predictable as possible in the light of the evolving economic data. of course, it is always easier to explain policy when the decisions are popular. we have to redouble our efforts when decisions are less popular, and so i am delighted to have an opportunity this evening to explain and to listen. i shall leave plenty of time for questions because one of the purposes of visits such as these is to see things from your perspective. as rabbie burns wrote, “ o wad some pow ’ r the giftie gie us to see oursels as others see us! ” the real test of the mpc is whether it aims continuously to meet the inflation target. for that reason, the monetary policy committee must be setting a policy for all seasons. some of you may say that it is all very well to set a policy for all seasons, but what about a policy for all regions, or parts of the uk? many critics disapproved of the recent increase in interest rates. indeed, the scottish council development and industry ( scdi ) itself described the decision as “ disappointing ”. it also described the rise as “ premature ” ; we would describe it as pre - emptive : prompt action to head off inflationary pressures in the future and so lower the level at which interest rates might otherwise need to be set. the scdi said that “ scottish business is regaining

you would wish to widen the net if the crowd is to add signal rather than noise. to illustrate this point, consider the following thought - experiment. imagine you have an endowment of time – 10, 000 hours – to make as informed a decision as possible on a complex question. i have not chosen 10, 000 hours randomly. in his book outliers, malcolm gladwell argues, based on a detailed set of case studies, that it takes around 10, 000 hours for one person to command true expertise in a subject area. now let ’ s choose a complex, and topical, question : will artificial intelligence ( ai ) cause mass unemployment? it is well - known that the views of experts ( and non - experts ) differ widely on this complex question and that the outcome is very uncertain. the problem we need to solve is not this but a simpler one : how many people should we choose to help inform our view on the impact of ai on unemployment? the conditioning assumptions ( such as the assumed path of interest rates ) and purpose of forecasts will vary between central banks and other forecasters. mankodi and pike ( 2018 ) discuss whether central bankers can become superforecasters. all speeches are available online at www. bankofengland. co. uk / speeches one possible answer to this question is one person. with gladwell ’ s 10, 000 hours under their belt, this person would be as well - informed on the impact of ai on unemployment as anyone on the planet – a true expert, perhaps even a phenomenon. this is the single person or, if you like, oracle ( in the ancient greek sense of the word ) solution to this decision problem. but is it the optimal one? there are reasons for doubt. evidence clearly suggests that, in a complex decision environment, drawing on non - expert opinion can provide added insight. it offers diversity of perspective, whose benefits are amplified if those diverse perspectives are discussed and debated to arrive at collective conclusions. this is surowiecki ’ s “ wisdom of crowds ” at work. so let ’ s go to the other end of the spectrum and draw instead on the insights of a big crowd – say, 1 million people, roughly the adult population of estonia. this would then, in effect, be an estonian referendum on ai and unemployment. clearly, we would now be drawing on a vast array of expert and non - expert opinion. but that would come at the expense of less time for deliberation.