Ben Broadbent: From NICE-to not so nice

Speech by Mr Ben Broadbent, Deputy Governor for Monetary Policy of the Bank of England, at the Bank of England, London, 20 May 2024.

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

Introduction and summary

Good morning! Thank you for asking me here today. After thirteen years as a member of the MPC this is my thirty-eighth and last speech and I wanted to offer a few reflections from that experience. I will also say something about the current outlook for inflation.

It's certainly been an eventful time. I joined the Committee in 2011, when the economy was still feeling the effects of the global financial crisis (GFC) three years earlier. That was then followed by the Euro area debt crisis, which perpetuated the credit squeeze in this country. After a period of relative calm we then went through the EU referendum and the negotiations that ensued, followed at the start of the current decade by the enormous effects of the pandemic and Russia's war in Ukraine.

Mervyn King once described the years preceding the GFC as the "NICE" decade (standing for "Non-Inflationary and Consistently Expansionary"). I'm not sure how one would characterise the period since ("Not-AS-Tranquil Years"?). But, if his description was designed as a warning that we couldn't expect such stability to last indefinitely, he's certainly been proved right.

Rather than going through these events individually I want to have a go at drawing some general conclusions from them.

From an economic perspective, two things strike one straightaway.