Good morning everyone and thank you for having me here today. It’s my first in person speech since the start of the pandemic and it’s a pleasure to come back up to Glasgow following my last visit two years ago. Inflation, as measured by the annual rise in the consumer price index (CPI), was 4.2% in October. Our latest MPC forecast projects inflation to peak at around 5 percent in the second quarter of 2022. Since the Bank of England is asked to hit an inflation target of 2%, we have some explaining to do. So, in light of that I’d like to step back and think about inflation more broadly, consider some theory that ... (full story)

{slideshow} Inflation on average is on target • Since BoE independence in 1997, inflation has averaged 2% • But inflation varies around the target • Of every deviation from target • 24% food & energy • 13% taxes • 25% imported goods and exchange rates • Inflation then : what went wrong in the 1970s? • Inflation 26%! • Transient commodity price rises, but … • wages ran ahead of slowing productivity • Inflation now: the 2020s • High commodity price rises, should be transient • What about wages and productivity? • High wages are good! • But high wages need high productivity too… • If the labour market stays tight, Bank ... (full story)