Bank of England commits to economic forecasting overhaul following Bernanke review

'Substantial' upgrade programme

The Bank of England has committed to an overhaul of its economic forecasting approach, following the recommendations set out in a review by former Federal Reserve chair Ben Bernanke.

In a 86-page document published today (12 April), Bernanke urged the Bank to modernise its "out of date" forecasting infrastructure as a high priority and consider supplementing its central economic forecast with so-called ‘alternative scenarios'. The former central banker also called on the BoE to either scrap or revamp COMPASS, the Bank's baseline economic model, in which he found "significant shortcomings". He also argued for the elimination of the Bank of England's fan charts, which he said suffer from "significant" analytical weaknesses, and have "outlived their usefulness". B...