Sarah Breeden: Engineering revisited

Speech by Ms Sarah Breeden, Deputy Governor for Financial Stability of the Bank of England, at the UK Women in Economics Annual Networking Event, London, 7 February 2024. 

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

Thank you for having me here today.

It has been seven weeks since my first speech as a monetary policy maker. Today I'll provide an update reflecting the significant data news since then.

My approach to assessing the data

In December, I set out how I thought monetary policymaking should be best considered as engineering rather than a science at present.

What did I mean by this? Having been hit by a series of unprecedented shocks – the departure from the European Union, a once-in-a-hundred-year pandemic and the start of the biggest war in Europe for 80 years – the UK economy had been subject to significant volatility. And, as the magnitude of the swings in the economic outcomes we monitor had gotten larger, so too had the magnitudes of the changes we have needed to forecast. In response to repeated supply shocks, this has been particularly true for inflation and wage growth (shown in the orange crosses in Chart 1).