David Ramsden: Navigating the economy through the Covid crisis

Speech by Sir David Ramsden, Deputy Governor for Markets and Banking of the Bank of England, at The Strand Group, King's Business School, virtual, 14 July 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

It's very good to be back speaking at this 51st Strand Group event and in my role as a Visiting Professor at King's. This is the third Strand Group event I've spoken at but my first time speaking to you virtually.

I've been involved in forecasting throughout my career, both in my current role as a Monetary Policy Committee (MPC) member and in my previous civil service career at HM Treasury. Outside of work I'm also a keen mountain walker – most recently being lucky enough to spend some time on the Isle of Skye – and it's hard not to see parallels between the two activities. Forecasts act as a map for policymakers of where the economy is heading, showing what adjustments to the current path are needed to avoid impending hazards and ensure they safely reach their policy objectives. 

I should be clear at the outset, to borrow a well-worn quotation, that "the map is not the territory". The forecast summarises what is likely to happen on the journey, but it is the economy itself that we as monetary policy makers must navigate, using the forecast alongside many other inputs, including a wide range of data and intelligence from the Bank's network of agents. And as can sometimes happen when walking in the mountains, different MPC members can interpret the territory in different ways, supplementing the use of a map with the equivalent of a compass and GPS as well as their own judgement.