inflation through relative price shocks and resource utilization. for example, the rise in the price of oil this year has lowered consumption demand by pinching households'real incomes and likely damped the growth in labor productivity by trimming energy input ; both of these factors have probably contributed to a lower equilibrium real wage, as i described earlier. if the impact on demand from these factors was accompanied by stronger global demand that boosted demand for u. s. goods generally, the forecasts of inflation would need to take this into account. in any event, resource utilization has been slackening, judging from the rise in the unemployment rate and the slow pace of economic growth in the united states, on average, over the past six to nine months. some have suggested that the price of oil is on a more significant upward trend than currently appreciated. 14 such an unanticipated shift in trend would not be embedded in the anticipated rate of change in slowly adjusting nominal prices and wages, implying that an adjustment period with distortions to relative prices would follow. moreover, there would likely orphanides and williams ( 2005 ) present a model in which perpetual learning leads to fluctuations in inflation expectations at various horizons and provide examples of how alternative monetary policy settings can influence the course of inflation expectations, thereby illustrating the importance of the interaction between expectations formation and efficient monetary policy. with regard to oil prices, bodenstein, erceg, and guerrieri ( 2008 ) discuss the effects on the price of oil and the u. s. economy from shocks to various factors in a theoretical model ; kilian ( 2007 ) provides an empirical analysis. more generally, this area remains a fertile field for future research. see bernanke ( 2008 ). one might question whether significant price trends can reasonably be anticipated for a storable commodity like oil. the price of such a commodity should reflect expected demand and " anticipated " increases should be limited to approximately the cost of storage, including the nominal interest rate. still, the following discussion would also apply to a shift in the trend in any important subset of consumer prices. be upward pressure on overall inflation during this period, reflecting the slow response of the rate of change in some nominal prices to the new trend in the price of oil. this tendency for higher overall inflation could risk a rise in inflation expectations. an appropriate monetary policy response would share many of the characteristics i discussed earlier. in particular, bringing overall inflation immediately back to the low rate consistent with price stability could be associated

on. and third, that resolvability is not a binary concept ; even once the 2022 commitment is fulfilled the work doesn ’ t stop. 2022 will see us pass the important milestone for the resolvability of major banks – but the work to maintain and improve the resolvability of firms within the uk resolution regime will continue. credibility and transparency in the making there are many previous milestones in the history of uk banks ’ resolvability, or lack of it, very few of them positive. with the 2021 budget just around the corner i want to take you back to the april 2009 budget, just under twelve years ago, when, in my role as chief economic adviser to the treasury, i had to advise on the consequences of the deficiencies in the global and uk pre - crisis regulatory framework. by spring 2009, what had started in the summer of 2007 as a liquidity crisis in global financial markets turned into a solvency crisis for a number of global and uk firms, resulting in the uk government bailing out banks and injecting public for more information see the bank of england ’ s written evidence submitted to the tsc ’ s 2017 capital inquiry all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice money to the tune of £137bn to stabilise the financial sector2. the contingent liabilities that the uk government had taken on to support bank funding or to underpin some major banks ’ balance sheets dwarfed that sum. at that time, we saw the very serious consequences of the lack of appropriate focus on the safety and soundness of individual banks and the financial system as a whole, including the absence of a credible resolution regime – by which i mean a regime that sets out our aims, to manage the orderly failure of institutions, accompanied with the tools to deliver them. as a result of these various failings globally and domestically the financial system acted as an amplifier, intensifying the uk economic downturn at great economic and fiscal cost. budget 2009 detailed the largest fall in uk gdp since the second world war and forecast a near doubling in the fiscal debt ratio in just four years, from 36 % of gdp in 2006 - 07 to 69 % in 2010 - 11. in order to underpin the uk ’ s economic and fiscal position, the government took the unusual step, at least in public finance terms as i am sure this expert audience would