Governors speeches at the Overseas Bankers Club and at the Bristol Chamber of Commerce

Quarterly Bulletin 1980 Q1
Published on 01 March 1980

Given at the annual banquet of the Overseas Bankers Club on 4 February 1980.

Let me sketch with a few touches the picture which the world, at the start of the 1980s, presents to the eye of a central banker, before going on to treat more selectively of some features which are of most direct concern to members of this Club. It is a picture of a world shot with anxiety and uncertainty. We are familiar enough with many of the dangers and difficulties, but the events of recent months have extended their scale as political tensions and economic uncertainties have met in malign combination. This has shown itself with a vengeance in the soaring, and now gyrating, price of gold, but it has also begun to percolate into other parts of the financial arena, generating nervousness and some strain in contractual relationships. Thus governments, international institutions and central banks, as well as the world's commercial banking system, now find themselve facing yet harder challenges.

The world economy, still convalescent since 1974, has begun to show signs of relapse. Output and world trade, it is true, were reasonably buoyant last year; but at the same time inflation, only then subsiding but obdurate still, began to break loose again. It is true also that the onset of a world recession, confidently foreseen, has been delayed. But a reason for delay appears to be the ominous one that inflation psychology has till now buoyed up spending.

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