Q: Since [Carney's] 1st QIRs, growth............>

BOE: Q: Since [Carney's] 1st QIRs, growth potential has fallen sharply. Why is

this and is the BoE to blame?

- A: When [Carney] joined, the UK was in the process of a decent recovery from

the GFC. Debate was on just how much space capacity existed in the economy. BoE

issued 'signal' guidance, signalling that a fair amount of stimulus would be

provided to work through this spare capacity. Half of potential growth drop is

due to space capacity, half of it is due to labour supply. In terms of BoE's

contributions via MonPol, big call BoE had to make was that equilibrium rates

were very low and are likely to remain very low. Sees this messaging as having

helped with spare capacity. Principal contribution via financial sector was

through FPC, not MPC. This restored financial sector to good health, but thinks

SMEs remain under-served and this will be addressed in future work.