with the findings of the ieo report, my central view is that qe achieves its goal of supporting demand and inflation. we have good evidence that it does indeed lower interest rates, through a combination of portfolio balancing, signalling and market liquidity channels. and while the specific contribution of the different channels is still uncertain and much debated, there is increasing evidence that the associated reductions in borrowing costs and accompanying increase in household wealth does feed through to increases in gdp growth and inflation. 17 there are, of course, other important considerations regarding the broader impact of qe. for example, as the ieo ’ s report notes, there has been significant public debate about the possible spillovers associated with qe, with a particular focus on the potential for distributional effects. 18 while this topic is not the focus of my remarks today, i would emphasise that the bank continues to take the analysis and communication of potential side - effects from its policy interventions extremely seriously. further details including transcripts of the oral evidence sessions are available on the committee ’ s website. as set out most recently by andrew bailey in his 2020 jackson hole speech and accompanying paper. the supporting paper for andrew bailey ’ s jackson hole speech, mentioned above, gives a good overview of the evidence for the uk, as does box b of the ieo report, while the 2019 bis committee on the global financial system report on unconventional monetary policy tools summarises the cross country evidence, as does ben bernanke ’ s 2020 aea presidential lecture. the bank has actively contributed to work on this topic, with a notable contribution, for example, by bunn, p, pugh, a and yeates, c ( 2018 ) " the distributional impact of monetary policy easing in the uk between 2008 and 2014. " all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice figure 5 : stylised qe transmission mechanism taken from the supporting paper for andrew bailey ’ s jackson hole speech. to make the macroeconomic effects of qe more concrete : previous bank of england analysis suggests that the initial £200 billion of qe during qe1 may have increased gdp by 1. 5 % – 2 % and inflation by 0. 75pp – 1. 5pp. 19 using similar estimates in a 2016 speech, mark carney, estimated that if the mpc had left monetary policy – bank rate and qe – unchanged in the

stability programme and national reform programme. in this regard, the government ’ s announcement of a seven - year capital investment programme focusing on the road network is an encouraging step forward. however, given that this additional investment coincides with a booming construction sector and more stringent procedures as regards the utilisation of eu funds, the possibility of slippages should not be overlooked. the government ’ s efforts need to be complemented with a better utilisation of savings accumulated by the private sector. the malta development bank can help in this regard, by identifying gaps in the financing of viable projects and partnering with financial intermediaries and other stakeholders to develop financial instruments that can finance them. apart from infrastructure bottlenecks, international institutions that monitor the business environment flag other areas that warrant immediate attention. while we have significant reservations on a number of methodological aspects underlying such surveys, we also share the view that in some areas we do need to step up our efforts very considerably. this is notably the case as regards the efficiency of court proceedings. although the time it takes to resolve court cases has more or less halved since 2010, it is still among the longest in the european union. other challenges we need to address concern the length of procedures to set up a business, the low educational attainment level relative to our peers and a limited capacity to innovate. these are essential elements that support investment and productivity. the development of an intelligent online business portal which ties all government business - related services into a one solid platform should put businesses in a better position to do business. the new legislation in the area of digital innovation provides the legal framework for business to embrace disruptive technologies. the private sector is encouraged to exploit the opportunities that these technologies entail in terms of efficiency gains, adaptability and overcoming labour shortages which remain widespread across sectors and skill levels. so far we have managed to address these gaps partly through labour activation policies targeting nationals and partly through foreign labour. however, one has to acknowledge that the national working age population is what it is. with the male participation rate already around the euro area average, a better utilisation of the domestic component of the labour supply can only be achieved if more women take up employment or if the labour force works longer. alternatively, production processes would need to rely on upgraded technology, such as automation and artificial intelligence. while further gains in the female participation rate are possible, these will likely materialise only gradually, as the participation rate of younger females already exceeds