BoE review highlights weaknesses in forecasting ability


Weaknesses in the Bank of England's forecasting process have been highlighted in a review by an ex-Federal Reserve official.

David Stockton described the Monetary Policy Committee's forecasts for growth and inflation as "too optimistic" and said the "serial persistence" of the errors needed fuller analysis. He criticised the MPC for a lack of systematic, quantitative analysis to interrogate its forecast errors, Bloomberg reports. Stockton has also recommended 21 options to improve the forecasting process, including encouraging more assertive staff, challenging the central bank's "house view" and incorporating financial stability risks into its forecasts. Stockton emphasised the latter point be high on the a...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week


More on Economics

Demand for key inputs will rise sharply, as nations look to accelerate their renewables programmes.

Greenflation: What are the drivers and how long will it last?

Metal price rises 'structural'

clock 12 August 2022 • 3 min read
The reduction was less than the 0.3% decline forecast by analysis

UK economy shrinks by 0.1% as cost-of-living crisis sets in

‘Difficult to dodge recession’

clock 12 August 2022 • 2 min read
Partner insight: Out of the wilderness

Partner insight: Out of the wilderness

Solving the problem of inertia in cash gives opportunities to both advisers and their clients, say Flagstone's Claire Jones and Grovewood Wealth Management's Lynne Gadsden.

Lynne Gadsden @ Flagstone
clock 11 August 2022 • 1 min read