In this speech I want to discuss recent developments in the economy, and the outlook, and offer some thoughts on the appropriate setting of monetary policy. I would like to make several main points. Activity seems to have recovered a bit faster than the central forecast in the May MPR, and risks lie on the side that the output gap will close earlier than previously expected. Some of the recent signs of labour market tightness probably reflect temporary frictions associated with the reopening of the economy, Covid-related uncertainty and furlough. Labour market slack is shrinking but probably not yet used up. Price ... (full story)